Indiana Personal Lines Study Guide

Personal Lines in Indiana is really two bodies of law: the cancellation and nonrenewal rules, which Indiana writes separately for auto and for homeowners, and the personal auto framework, which is tort-based with no personal injury protection anywhere in it. The cancellation rules supply most of the state-law questions on this exam, and they reuse the same three numbers for different triggers — which is exactly why candidates miss them.

Ten, twenty, sixty — and only one of those is a notice period

Start with the number that is not a notice period. Sixty days is the freeze point: under IC 27-7-6-4, once an auto policy has been in force sixty days, the insurer may cancel only for reasons the statute enumerates. Before day sixty it has a broader hand.

Now the notice periods. Ten days for nonpayment of premium — auto and homeowners alike (IC 27-7-6-5; IC 27-7-12-3). Twenty days for everything else: cause-based cancellation on auto (IC 27-7-6-5(a)), cancellation of a homeowners policy in force more than sixty days (IC 27-7-12-3), and nonrenewal of either (IC 27-7-6-6; IC 27-7-12-4).

Homeowners then adds one wrinkle worth holding: inside the first sixty days, the homeowners notice drops to ten days, the same as nonpayment. So a homeowners policy cancelled on day forty-five takes ten days’ notice, not twenty — and an item built on that date is checking whether you reached for twenty out of habit.

The insurer does not have to tell you why — unless you ask

This is the Indiana rule that runs hardest against candidates’ instincts, and it is worth a paragraph of its own.

Indiana does not require an insurer to state its reason inside the cancellation or nonrenewal notice. Under IC 27-7-6-9 and IC 27-7-12-4, the reason is furnished on the insured’s written request. Many states require it proactively, national material teaches that, and so the plausible-sounding wrong answer — “the notice must state the specific reason” — is the one most candidates choose.

Two conditions are doing the work in the correct answer: the request must come from the insured, and it must be in writing. An item describing a phone call to the agent is describing something that does not trigger the obligation.

Personal auto: tort, 25/50/25, and no PIP

Indiana is a fault-based (tort) state. There is no no-fault system and no mandatory personal injury protection. Medical payments coverage exists and is optional. If a question puts an Indiana driver into a PIP threshold analysis, the question has imported another state’s law.

The financial responsibility minimums under IC 9-25-4-5 are 25/50/25 — $25,000 bodily injury per person, $50,000 per occurrence, $25,000 property damage.

Uninsured and underinsured motorist coverage must be OFFERED, not carried. Under IC 27-7-5-2, UM must be offered at limits equal to the bodily injury liability limits, UIM is offered alongside it with a statutory minimum of $50,000, and the insured may reject either in writing. The two operative words are offered and writing: an oral rejection is not a rejection, and a policy that never offered the coverage has a problem the insured did not create.

One borrowed rule you need for personal auto claims

Recoveries on a personal auto liability claim are apportioned under Indiana’s Comparative Fault Act, IC 34-51-2 — a modified system with a 51% bar. The Property & Casualty chapter works through it in full, including the exception that catches almost everyone.

For personal lines purposes, carry one consequence of that exception: a claim against a city, county or state agency is not governed by the Comparative Fault Act, so an insured who is even slightly at fault recovers nothing from a municipal defendant. It is the reason a collision with a snowplough is a different conversation from a collision with a neighbour.

Credit information — permitted, but fenced

Indiana’s Use of Credit Information Act (IC 27-2-21-16) allows insurance credit scoring in personal lines and then fences it in three ways.

An insurer may not deny, cancel, nonrenew or set a renewal rate solely on credit. It may not use income, gender, ZIP code, ethnicity, religion or marital status. And the credit report relied on must be no more than 90 days old.

The pattern to notice is the same one running through the cancellation rules: Indiana rarely prohibits the act outright. It regulates how the act may be done — and the exam builds its distractors out of the difference between “may not” and “may not solely.”