Indiana Legislators Submit Pair of Car Insurance Proposals

Indiana lawmakers are considering two pieces of legislation that would require auto insurers to make “good faith” efforts to reach policyholders who have filed accident claims and set a deadline for coverage providers to notify state officials about cancellation of their Indiana car insurance policies.

capitol building in indianapolisOne of the bills, sponsored by state Sen. Ron Grooms and introduced earlier this month into the state Legislature, would require coverage providers to immediately attempt to contact policyholders and other parties involved in accidents that result in claims being filed.

The proposed law, which applies to crashes for which the policyholder is believed to have been at fault, would require companies to make efforts to contact policyholders and any other individuals necessary in order to settle a claim. It also bars insurers from requiring third parties to contact policyholders on their behalf.

The legislation stipulates that insurers must continue trying to get in touch with policyholders until 30 days have passed. If those efforts are fruitless and a police report has been filed for the crash, the insurer would be required to settle with the third party based on the information found in the police report, unless the party who suffered damages objects to doing so.

Insurers’ failing to meet those requirements would be considered an unfair claims practice.

Another bill currently in the state Senate mandates that coverage providers notify state transportation officials within 10 business days about any policies that have been canceled or are due to be canceled. It also calls on state officials to suspend the vehicle registrations of motorists who have had their coverage canceled.

The bill specifies that insurers must send notice to state officials via first-class mail or by other means that are at least as timely and authorizes the state insurance commissioner to suspend or revoke the state licenses of insurers that do not comply.

Notices sent to drivers facing cancellation must say that “The Indiana Bureau of Motor Vehicles is being notified of the cancellation or expiration of your motor vehicle policy. Indiana law requires you to continuously maintain financial responsibility with respect to your motor vehicle for as long as you operate your motor vehicle on the public highways of Indiana.”

Under the proposed legislation, drivers with canceled policies must contact the bureau within 20 days to explain how they intend to meet the state’s insurance requirements.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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