An auto insurance policy is a document proving that you have the financial responsibility to pay for certain damages or injuries you cause in an accident. The state of Indiana requires all drivers to have a minimum amount of both underinsured and uninsured motorist coverage, which can pay for your injuries if the other driver isn't adequately insured.

Ways to Establish Financial Responsibility

The simplest way for most drivers to prove financial responsibility is to purchase a liability policy through an insurance provider that is licensed to do business in the state.

Sometimes getting insurance for your vehicle can be difficult, especially if you've had numerous accidents in past years or a previous policy that was canceled for nonpayment or other issues. Because liability coverage is required for all Indiana drivers, the state has created the Indiana Auto Insurance Plan, which is a special insurance plan for those who have been turned down for traditional policies. You can get more information or apply for this program at any state-licensed insurance agency.

Liability coverage isn't the only way to show financial responsibility. You have options, which are the following:

• A policy of liability coverage from a state-licensed insurance provider.

• A deposit with the state treasurer in the amount of $40,000.

• A trust fund with a market value of $40,000.

• A bond issued by a surety company. For required amounts and more details, contact the BMV at (317) 233-6000.

Indiana Liability Insurance Requirements for Private Passenger Vehicles

The state has set the following minimum requirements for liability insurance:

• Uninsured motorist coverage: $25,000 bodily injury coverage for one person in a single accident.

• Uninsured motorist coverage: $50,000 bodily injury coverage total in a single accident.

• Underinsured motorist coverage: $50,000 bodily injury coverage total in a single accident.

• $10,000 property damage coverage.

The amounts above are simply the minimums; depending on your vehicle and your financial situation, it's often wise to purchase additional coverage, including comprehensive and collision. Be sure to check out the various types of insurance coverage available to you before making a final commitment.

Proof of Insurance and Financial Responsibility

If you want to register and/or title your vehicle, you'll have to show proper proof of insurance. Typically this just means bringing in the insurance card from your provider when you turn in your registration or titling paperwork.

The BMV has also instituted the Electronic Insurance Forms Submission (EIFS) program, which allows licensed insurance agents to electronically submit insurance information to the BMV on behalf of their customers. Ask your insurance agent if he or she has signed up for the EIFS program; it can save time and reduce errors in the long run.

While you as a driver cannot submit your insurance information electronically to the BMV, you can update your insurance information on record with the BMV at any time. Simply go to the myBMV website. You'll need to create an account the first time you visit, and then sign in each time after that.

Whether you bring in your insurance card or your agent submits the information electronically, you won't be able to register or title your car without proving to the BMV that you have at least the minimum required coverage.

Always keep a copy of your insurance information in your vehicle. You should be able to show proof of insurance at any time, if requested to by law enforcement or other officials.

If you ever get pulled over by a law enforcement officer or are involved in an accident and you have no proof of insurance, the BMV will send you a Certificate of Compliance. This document gives you 40 days for your insurance agent to certify that you did indeed have the required coverage at the time of the traffic stop or accident. If you're not able to certify that you did have coverage, your driver's license will be suspended (see below for details).

Penalties for Failure to Maintain Financial Responsibility

The most obvious penalty for not having adequate insurance coverage is that you won't be able to register or title your vehicle.

If you did have insurance but it lapsed or was canceled for any reason―and you didn't get a policy to replace it―you've committed a Class A infraction and you run the risk of having your driver's license and even registration suspended. The suspension is typically 90 days for the first offense, and then up to one year for any other insurance lapses within a three-year period.

Driver's License Reinstatement

To remove the suspension and reinstate the license, you'll have to pay one of the following fines:

• $150 for first offense

• $225 for second offense

• $300 for third (or subsequent) offense

You'll also have to prove that you currently have the required minimum insurance coverage. This often means you'll have to get an SR-22 form from your insurance provider and keep it on record with the BMV for three years. If your insurance lapses anytime during that period, the BMV can immediately suspend your license again.