Indiana Personal Lines Regulations (State Outline III, 5 scored items)

Outline reference: Indiana Specific Content Outline, section III, Personal Lines Regulations, 5 items: A. Auto Claims; B. Automobile Insurance (1. Financial Responsibility, 2. Uninsured and Underinsured Motorist Coverages, 3. Policy Cancellation and Nonrenewal, 4. Automobile Insurance Plan, 5. Transportation Network Company Drivers); C. Other Property and Casualty Laws (1. Mine Subsidence, 2. Termination of Residential Policies).

About 5 of the 35 state items come from here. Statute text is the official Indiana Code 2026, compared with the FindLaw mirror (see Chapter 8). Read the box in 11.1 before you memorize any notice period: several rules have one figure for older policies and another for policies dated on or after January 1, 2027.

11.1 What State III Covers and Where the Rules Sit

The statutes: A. Auto Claims IC 27-4-1.5; B.1 Financial Responsibility IC 9-25; B.2 UM and UIM IC 27-7-5; B.3 and B.4 Cancellation, Nonrenewal and the Automobile Insurance Plan IC 27-7-6; B.5 TNC Drivers IC 8-2.1-19.1; C.1 Mine Subsidence IC 27-7-9; C.2 Residential Termination IC 27-7-12.

Three statutes handle cancellation: private passenger auto is IC 27-7-6, homeowners and other residential property is IC 27-7-12, and commercial policies are IC 27-1-31 (Chapter 12). Each excludes the others in its scope section, so decide which statute a question is about before you reach for a number.

### In Indiana - 2026 law (Public Law 86-2026) House Enrolled Act 1260 (Public Law 86-2026, signed March 4, 2026) amends the sections below. They are marked effective July 1, 2026, but the rules in this chapter apply by policy date. The older figures come from the January 1, 2026 Code text and the struck-out words in the enrolled act. | Rule | Policies issued, delivered, amended, or renewed before January 1, 2027 | Policies issued, delivered, amended, or renewed on or after January 1, 2027 | Section | |---|---|---|---| | Auto nonrenewal notice | 20 days | 30 days | IC 27-7-6-6(a); 27-7-6-0.5 | | Residential nonrenewal notice | 20 days | 60 days | IC 27-7-12-4(a)(5); 27-7-12-1(b) | | Aerial images as the sole reason for a residential nonrenewal | No special rule | Notice, review, cure, appeal, and renewal steps | IC 27-7-12-4(a)(6); 27-7-12-6.5; 27-7-12-1(b) | | Notice of material change, personal auto and homeowners | Chapter applied to policies on or after June 30, 2026 (the text the act replaced) | Chapter applies to policies on or after January 1, 2027 | IC 27-2-28-1 | Effective July 1, 2026, not tied to a policy date: new IC 27-7-5-2(i), a policy covering liability in excess of a self-insured retention is a commercial umbrella or excess policy for the UM/UIM offer rule (11.4). The guaranty changes (Chapter 8) are also effective July 1, 2026. Everything else in this chapter, including the cancellation periods, the 10-day producer notice, and the closed lists of reasons, is not changed by the act. The 20-day figures in 11.5 and 11.9 remain the rule for older policies. Read the stem for a policy date. No practice question in this book depends on a figure that Public Law 86-2026 changes.

11.2 Auto Claims (IC 27-4-1.5)

Indiana gives the insured a voice in the choice of repair parts and makes ignoring the insured an unfair claim settlement practice.

• Body part: a replacement for a nonmechanical sheet metal or plastic part that generally forms the exterior of a motor vehicle. (IC 27-4-1.5-1) Body shop: repairs damage to the exterior. (IC 27-4-1.5-2)
• New body part: not previously attached to a motor vehicle; used is one that was. (IC 27-4-1.5-6, -7)

The notice-and-approval rule

An insurer obligated to pay at least part of the cost of repairing a vehicle's exterior may not direct a body shop to repair it until it has given the insured a written notice of the right to approve the type of body parts: new parts made by or for the manufacturer, new parts not made by or for the manufacturer, or used parts. The insured must have an opportunity to indicate the choice in writing. (IC 27-4-1.5-8)

The section applies only in the five years after the model year of the vehicle. (IC 27-4-1.5-8(d))

Each of these is an unfair claim settlement practice under IC 27-4-1-4.5: directing the shop to repair without the written notice (-9); without the opportunity to approve in writing (-10); with a different type of part than the insured approved (-11); or refusing to pay for, or to direct the shop to use, the approved type (-12). (IC 27-4-1.5)

The trigger is that the insurer directs a body shop; an insured who picks the shop is not "directed."

Claim complaints to the commissioner

A person who has submitted a claim and believes an unfair claim settlement practice occurred may file a complaint with the commissioner. The complaint rules are in IC 27-4-1-5.6, not in IC 27-4-1.5. (IC 27-4-1-5.6(a)) The commissioner, if believing a practice occurred, delivers a copy to the insurer and answers the complainant in writing within 10 business days of a written complaint; the insurer reports to both within 20 business days. A public adjuster may file only with the policyholder's written consent. Insurers must give policyholders written notice of these remedies (new policyholders when the policy is issued), and are subject to action under IC 27-4-1-6. (IC 27-4-1-5.6(e)) Item (16) of IC 27-4-1-4.5 (Chapter 10) is "the unfair claims settlement practices defined in IC 27-4-1.5," which is why the body-part violations above are unfair claim practices.

### In Indiana Sales tax on a total loss. Under Bulletin 82 (1994), auto insurers are directed to pay sales tax in addition to the value of a totaled vehicle at the time the claimant is paid. (IDOI Bulletin 82) Returning service members. An insurer may not set a motor vehicle premium above its filed plan because the applicant lacked coverage for a period, if the applicant is serving in, or served within six months before applying in, a US armed service. (IC 27-1-22-26; Bulletin 126)

11.3 Financial Responsibility (IC 9-25)

Financial responsibility is proof that a driver can pay for harm caused with a car. A liability policy is the usual proof, not the only one. Indiana ties it to registering a vehicle and operating it on a public highway. "The bureau" is the Bureau of Motor Vehicles.

The minimum amounts

"Proof of financial responsibility" means proof of ability to respond in damages, for each registered motor vehicle, in at least these amounts: (IC 9-25-2-3; IC 9-25-4-5)

Written as limits, this is 25/50/25.

Continuous maintenance and suspension

• It must be continuously maintained while a motor vehicle is operated on a public highway, and a person may not register or operate a vehicle without it. (IC 9-25-4-3(a); 9-25-4-1) "Public highway" includes a privately owned business parking lot and drive open to the public. (IC 9-25-2-4)
• The bureau shall suspend driving privileges, registration, or both, of a person who fails to maintain it. (IC 9-25-4-3(b), (c))
• 180-day stay. On proof of future financial responsibility, the bureau shall stay the suspension for 180 days; no lapse ends it, a reported lapse lifts the stay. (IC 9-25-4-3(e), (f))

How it is shown

Financial responsibility is "in effect" if one of these provides the required amounts: (IC 9-25-4-4)

1. a motor vehicle liability insurance policy issued for the vehicle or the operator;
2. a bond executed for the vehicle; or
3. self-insurer status, shown by a certificate of self-insurance issued by the bureau.

Proof to the bureau may be a policy, a bond, or a deposit of money or securities; to a law enforcement officer, paper or electronic, including an image on a telecommunications device. (IC 9-25-4-7) The carrier files proof as the bureau prescribes. (IC 9-25-4-8) This version of IC 9-25-4-7 and -8 is marked "effective until 1-1-2028." A later version, effective January 1, 2028 (P.L.227-2025), allows proof, officer verification and carrier filing through a secure online insurance verification system under IC 9-25-11.

11.4 Uninsured and Underinsured Motorist Coverages (IC 27-7-5)

The structure: offer, then written rejection

Indiana does not require UM or UIM in every auto policy. The insurer must make it available, and the named insured must reject it in writing to go without.

For each auto liability policy for a vehicle registered or principally garaged in Indiana, the insurer shall make available UM and UIM coverage (IC 27-7-5-2(a)) for insureds legally entitled to recover damages for bodily injury, sickness, disease, or death (and, for UM, property damage), in limits not less than the IC 9-25-4-5 limits and at least equal to the policy's bodily injury liability limits, unless rejected in writing.

UIM floor. UIM must be made available in limits of not less than $50,000, and insurers may not sell or provide UIM below $50,000.

Rejection

• The named insured may reject, in writing, both coverages, UM alone, or UIM alone, on behalf of all insureds and all persons entitled to coverage. (IC 27-7-5-2(b))
• It must say which coverage is rejected and the date it is effective. (IC 27-7-5-2(c))
• After a rejection, unless the insured later asks in writing, the insurer need not offer UM or UIM in a renewal or replacement policy.
• UM property damage requires UM bodily injury.

Umbrella, excess, and certain commercial policies

The offer duty does not apply to: (IC 27-7-5-2(d), (e), (f), (g), (h))

• commercial or personal umbrella or excess liability policies (written notice to the named insured if the insurer reduces or removes the coverage by endorsement);
• a Class 2 or Class 3 commercial policy, for a vehicle the insured does not own ("owner" includes a renter or lessee with exclusive use for more than 30 days).

A rejection in the underlying policy is also a rejection in the umbrella or excess policy.

Definitions that decide claims

• Uninsured motor vehicle: a vehicle without liability insurance, or not in compliance with IC 9-25 or a similar law elsewhere, including an insured vehicle whose insurer cannot pay the IC 9-25-4-5 limits because of insolvency. (IC 27-7-5-4(a))
• Underinsured motor vehicle: an insured vehicle where the limits available under all bodily injury liability policies covering persons liable to the insured are less than the limits of the insured's UIM coverage. (IC 27-7-5-4(b)) The test compares the at-fault party's limits to the insured's UIM limits, not to the damages.
• The insolvency rule applies only where the insurer becomes insolvent within two years after the accident. (IC 27-7-5-4(c))

UM property damage

• Insurers must offer UM property damage with no deductible, and may offer it with a deductible of not more than $300, waived if the insured vehicle was legally parked and unoccupied. (IC 27-7-5-3(a))
• Recoverable: the insured vehicle and personal property in it, not loss of use. (IC 27-7-5-3(b))
• The claim must name the at-fault operator; there is no liability where the other owner or operator cannot be identified. (IC 27-7-5-3(c))

What the insurer pays

• Total liability of all insurers for one accident may be limited to the highest limit under any one policy, never less than the IC 9-25-4-5 minimums. (IC 27-7-5-5(a))
• Maximum bodily injury payment: the lesser of the per person UM/UIM limit minus what was paid by liable persons, or the total damages minus what was paid. (IC 27-7-5-5(c))

Subrogation

The policy may make the insurer subrogated to the insured's tort claim to the extent of its payment. (IC 27-7-5-6(a)) A UIM insurer loses subrogation against the underinsured motorist if it received written notice of a bona fide settlement offer, with a certification of the motorist's liability limits, and fails to advance an equal payment within 30 days. (IC 27-7-5-6(b)) An insurer paying because of an insolvent insurer cannot recover from that insurer's insured or the guaranty association, except above the insolvent insurer's policy limits. (IC 27-7-5-6(c))

### In Indiana - 2026 law Public Law 86-2026 added IC 27-7-5-2(i), effective July 1, 2026: a policy that provides coverage in excess of a self-insured retention is a commercial umbrella or excess liability policy under subsection (d). The insurer need not make UM/UIM available in it, must give written notice if it reduces or removes the coverage by endorsement, and an underlying commercial rejection is also a rejection in it. Before July 1, 2026 the subsection did not exist.