A DRIVER'S GUIDE TO
INDIANA'S FINANCIAL
RESPONSIBILITY
LAW
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Catching uninsured
motorists requires checking ALL motorists.
If you commit a traffic violation or are involved in an accident, you must prove that you are covered on the day of the incident or your driver's privileges will be suspended for 90 days and you must pay a reinstatement fee. The law is very straightforward. Of course most drivers are like you -- they carry insurance. But to protect you, Indiana takes an additional step and requires proof of coverage
Some people, however, try to get around the law.
Proving that you had liability coverage in force on that particular day, however, requires the help of you insurance agent -- the only one who has the facts necessary to certify that you had coverage that day.
You can imagine the methods unscrupulous drivers try to use to avoid carrying the necessary coverage throughout the year. (Most common is to buy coverage before registering their vehicle and then canceling that coverage or letting it lapse through non-payment of premiums.) But the goal of Indiana's Financial Responsibility law is not to have drivers carry a slip of paper or a copy of a policy. It's too make sure drivers carry liability coverage.
Uninsured
drivers cost Hoosier motorists millions of dollars each
year in higher insurance rates, property damages and
hospital bills that are eventually passed on to all
insured motorists.
Watch Your Mail
It can take up to three months for police and courts to process accident report forms and mail notification of a traffic conviction to the Bureau, which then must process the police and court forms and issue notices and Certificates to the motorists involved.
That means a driver could receive a Financial Responsibility notice from the Bureau four to six months after the original accident or traffic offense took place.
It takes 7 to 10 days for the Bureau to process a certificate, so, to avoid suspension, it is important for insurance representatives to complete and mail compliance forms to the BMV as soon as possible.
If you receive one of these in the mail,
immediately give it to your insurance agent and ask him
or her to complete and mail it well before the due date.Not your own vehicle? Coverage is still required.
If a motorist receives a ticket or is involved in an accident while driving a vehicle owned by someone else, financial responsibility can be proven under one of two conditions.
- The vehicle owner's insurance policy includes "guest driver liability" to cover drivers of the vehicle other than the owner.
- The driver has a policy which covers any vehicle the driver operates.
You have only 40 days to respond.
After an accident or conviction, the Bureau of Motor Vehicles will issue a notice and mail a Certificate of Compliance form -- the ONLY acceptable proof of insurance -- to the address on your driver's license.
Drivers have 40 days from the issuance of the Certificate to have their insurance agent complete the certificate, and return it to the Bureau. If the Certificate is not back at the Bureau by that 40 day deadline, the driver's license is suspended for three months. After the suspension period, the driver can apply for reinstatement, which includes providing proof of current insurance and paying a reinstatement fee.
Penalties for Financial Responsibility Non-Compliance*
| First Offense | Second Offense** | Third and Subsequent Offense(s) |
| 90-day suspension | 90-day suspension | 90-day suspension |
| $150 Reinstatement Fee |
$225 Reinstatement Fee |
$300 Reinstatement Fee |
* Each Offense is treated as a separate offense, and carries an additional reinstatement fee and suspension time
** If two Financial Responsibility offenses occur within three years, there is a separate one-year suspension.
Make sure you keep your address up to date.
State law requires that drivers notify the BMV of any mailing address change. If the driver's mailing address is incorrect, it could lead to a license suspension, because Certificates of Compliance and other important notices may not be forwarded more than one year after a change of address.
One in five drivers in
Indiana is on the road without insurance.
Most people are law abiding. However, uninsured drivers are a threat to all Indiana motorists, even the four out of five drivers who have insurance, by transferring the costs of their accidents to the insurance rates of responsible drivers. That's why financial responsibility is the law for all Indiana drivers.
The goal of enforcement.
Financial responsibility laws are designed to find uninsured motorists. The purpose id to verify current coverage or get uninsured drivers off the road.
Uninsured motorists statistically are more likely to be involved in accidents and tend to receive traffic citations more often than other drivers, so by costing a "net" over all drivers involved in accidents or traffic violations reported to the BMV, the goal is to identify and suspend drivers who are not in compliance with the law.
Responsible drivers who are in
compliance should have nothing to worry about and be able
to prove coverage by having their insurance agent file
the required Certificate of Compliance.
The law requires coverage.
Indiana's Financial Responsibility law requires all persons who operate a motor vehicle on state roadways to be able at all times to cover the costs associated with a traffic accident. For virtually every driver, this requires that they maintain liability insurance on any vehicle they drive, regardless of who owns the vehicle.
In 1990, to give police a way to spot-check compliance with this long-standing law, the Indiana General Assembly passed a law requiring all drivers involved in a traffic accident to send proof of financial responsibility to the BMV.
In 1994, to identify even more uninsured drivers, the General Assembly included moving traffic violations as part of financial responsibility compliance.
To avoid suspension:
- Always keep the address of your driver's license up to date
- Always keep your automobile insured
- Ask your insurance agent about Indiana's proof of insurance laws.
- Don't wait. Take care of any paperwork you get from the Indiana Bureau of Motor Vehicles (BMV) after an accident or a ticket right away.
This copy of the Indiana
Financial Responsibility Law
Provided By
Indiana Insurance Services
Michael
Daniel
Agent/Owner
E-Mail: insure@indymall.com
3115
Meridian Parke Dr., Suite P
Greenwood, IN 46142
(317) 882-3000
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Copyright 1996-1998, Decision Support Technology, All Rights Reserved
Reproduced with permission of the Indiana Bureau of Motor Vehicles, October 17, 1996