Average Cost of Car Insurance in Indiana

Indiana requires all auto insurance policies to include uninsured and underinsured motorist coverage at the same limits as your liability coverage, unless you reject this coverage in writing. This requirement exists because an average of 16% of drivers in Indiana don't have car insurance, meaning there's roughly a 1 in 6 chance the other driver won't have coverage if you're in an accident. With the state's rising number of uninsured drivers, this coverage has become increasingly important for financial protection.

Indiana is positioned as one of the regions prone to hail in the nation, with frequent occurrences of thunderstorms, hailstorms and tornadoes. Hailstones account for between 50% and 80% of homeowner insurance claims annually from severe convective storms, and hail has become an increasing contributor to claims in recent years due to frequency and severity. Comprehensive coverage is important for Indiana drivers to protect against weather-related car damage.

Indiana operates under a traditional at-fault insurance system, meaning the driver who causes an accident is financially responsible for damages. Unlike no-fault states, Indiana drivers turn to the at-fault party's insurance for compensation after accidents. This system typically results in lower base insurance costs compared to no-fault states because drivers aren't required to carry expensive personal injury protection coverage. Indiana's fault-based approach means bad or reckless drivers end up paying more, while good, responsible drivers pay less.

Indiana takes insurance fraud seriously, with violations ranging from Class A misdemeanors to Level 5 felonies depending on the severity and value involved. First-time insurance fraud convictions carry penalties of substantial prison time with significant fines. Insurance companies in Indiana work directly with local, state and federal law enforcement to investigate potential fraudulent claims and collaborate with organizations like the National Insurance Crime Bureau.

Indiana's average annual premium for full coverage auto insurance is significantly less than the national average. It's difficult to say why insurance prices are lower in Indiana, especially since the state ranks among the top half of states for uninsured drivers, population density and auto thefts. The state's competitive insurance market and cost-effective options, combined with lower population density leading to fewer accidents and claims, contribute to more reasonable insurance rates.

Teenage drivers in Indiana face higher insurance costs, with 16-year-old drivers having the highest crash rate and paying substantially more annually for full coverage. Data shows that 16-year-old drivers have crash rates more than 1½ times higher than 18 to 19-year-olds, with their risk of crashing being highest in the first months of obtaining their license.

Indiana requires minimum liability insurance of 25/50/25, which includes $25,000 for bodily injury per person, $50,000 for bodily injury per accident and $25,000 for property damage per accident. The state's minimum coverage costs less than the national average. However, these minimum limits may not provide adequate protection for serious accidents, making higher coverage limits a wise consideration for most drivers.