Indiana law requires that every registered vehicle on the road must have proof of financial responsibility, or insurance, at a minimum of $25,000 for bodily injury or death for liability that arises out of that ownership, maintenance or use of the vehicle. I.C. 9-25-4.
Unfortunately, there are many drivers who choose to break the law and “fly under the radar” without insurance. Up until recently, not having insurance didn’t affect these drivers when they were not at fault for the accident, but now a new law limits recovery for not-at-fault drivers who are uninsured.
Indiana Code § 27-7-5.1 and § 34-30-29.2 went into effect July 1, 2015. These statutes are intended to limit damages by uninsured motorists with a history of driving uninsured. Indiana is not the first state to enact what are commonly referred to as “no pay, no play” statutes.
Indiana drivers should be aware of these statutes because the No Pay, No Play law prohibits certain Indiana uninsured motorists from collecting noneconomic damages against the at-fault motorist and his or her insurance carrier. According to the statute, noneconomic damages means costs for the following:
- Physical and emotional pain and suffering,
- Physical impairment,
- Emotional distress,
- Mental anguish,
- Loss of enjoyment,
- Loss of companionship, services, and consortium,
- Any other nonpecuniary loss.
Pursuant to Indiana Code §27-7-5.1-5, the individual must not only be uninsured at the time of the accident at issue, but also must have had a prior violation of the financial responsibility laws. Under the law, a previous violation is defined as:
- An individual who owns a motor vehicle that is involved in an accident and for which financial responsibility is not in effect as required by I.C. §9-25-4 AND,
- During the 5 years immediately preceding, the individual has been required to provide proof of future financial responsibility under I.C. §9-25-8-6(b).
The Indiana Car Insurance Law Applies to Passengers Too
The Act applies regardless of whether the uninsured motorist with the previous violation was operating the vehicle at the time of the accident. Meaning that if the uninsured motorist owns a vehicle of their own, but was involved in the subject accident as a passenger, the Act still applies.
Exceptions to the Rule
- An uninsured motorist with a previous uninsured violation who is less than 18 years old;
- A person other than the uninsured motorist with a previous uninsured violation; or
- A person other than the uninsured motorist who operates a motor vehicle involved in an accident and is convicted of a crime in connection with the accident.
- The injury and/or damage was caused intentionally.
Public Policy Rationale
There is a valid public policy rationale behind the “No Pay, No Play” laws; those who do not buy insurance should not receive noneconomic benefits from those who do purchase insurance even though the motorist with insurance is the at-fault driver. In other words, if you don’t abide by the state financial responsibility laws, then you should not be able to benefit from them either. Indiana does cut a little bit of slack by allowing the uninsured motorist one strike during a five (5) year period before applying the law.
What Does This Mean?
Joe, who is thirty years old, is driving his vehicle down Meridian Street in Indianapolis. While driving down Meridian, Joe is struck by a vehicle driven by Bob. Bob was not paying attention and ran a red light at 38th street, t-boning Joe. Joe suffers from a broken arm, neck pain, and some minor cuts and bruises. After 4 months, several doctor visits, and physical therapy, Joe is pretty much back to normal. Bob’s insurance company makes him an offer to settle his case. Traditionally, Joe would be entitled to recover for his medical bills, lost wages, and pain and suffering, But, Joe doesn’t have insurance and two years ago he was in a fender bender and received a citation for driving without insurance. Because of Indiana’s new laws, Joe will not be able to recover for his noneconomic damages including pain and suffering.