Updated June 2026
What Is Liability Insurance Insurance?
Liability insurance covers damage you cause to other people and their property when you're at fault in an accident. It pays the other driver's medical bills, lost wages, vehicle repairs, and legal fees up to your policy limits. If you cause $40,000 in damage but carry only $25,000 in property damage liability, you're personally responsible for the remaining $15,000. Indiana requires all drivers to carry minimum liability coverage of $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $25,000 for property damage.
- You rear-end a car at a stoplight. The other driver has $18,000 in medical bills and $6,500 in vehicle damage. Your liability policy pays the full $24,500 because it falls within Indiana's minimum $25,000 per person and $25,000 property damage limits. Your own vehicle damage is not covered.
- You cause a three-car accident. Two people suffer injuries totaling $70,000 in medical expenses. Your $50,000 bodily injury per-accident limit pays out fully, but you're personally liable for the remaining $20,000. Injured parties can sue you or pursue wage garnishment for the shortfall.
- Your license is suspended for unpaid tickets. You don't own a car, but Indiana requires proof of liability insurance to reinstate. You purchase a non-owner liability policy for $35–$55 per month, which covers you when driving a borrowed or rental vehicle and satisfies the BMV's reinstatement requirements without insuring a vehicle you don't have.
Who Needs Liability Insurance Insurance?
Liability insurance is legally required to reinstate a suspended Indiana license, regardless of suspension cause. Drivers without a vehicle must carry a non-owner liability policy to satisfy BMV proof-of-insurance requirements. Anyone driving a vehicle in Indiana must maintain continuous liability coverage or face license re-suspension and extended SR-22 filing periods.
If your suspension requires SR-22 filing, your liability policy must remain active for the entire filing period without lapses. A single missed payment triggers an automatic BMV notification and extends your filing requirement. Choose higher-than-minimum limits if you have assets to protect or if your suspension resulted from an at-fault uninsured accident.
How Much Does Liability Insurance Insurance Cost?
Liability-only policies in Indiana typically cost $45–$85 per month for minimum state limits, or $540–$1,020 annually. Non-owner liability policies for suspended drivers cost $35–$65 per month.
- Drivers with a DUI or suspended license pay 60–120% more than standard-risk drivers for the same liability limits.
- Increasing bodily injury limits from $25,000/$50,000 to $100,000/$300,000 adds $15–$30 per month.
- Marion County and Lake County residents pay 20–35% more than rural Indiana counties due to accident frequency and theft rates.
- A driver with two at-fault accidents in three years pays 40–70% more than a driver with a clean record.
- Young drivers under 25 with suspended licenses face combined surcharges often exceeding 150% of base liability rates.