Related: see the companion guide.
Key takeaways
- The statutory comparison includes coverage available under all bodily-injury liability policies covering persons liable to the insured.
- The total available amount is compared with the insured’s UIM limit at the time of the accident.
- Indiana’s definition excludes a vehicle that is uninsured under Indiana Code § 27-7-5-4[1](a).
- In a September 2026 decision, the Court of Appeals applied that rule to a wrongful-death settlement split between two parents: each parent’s own share, not the combined payment, was compared with the UIM limit.
- For qualifying policies, Indiana Code § 27-7-5-2[2] requires UM and UIM coverage in statutory amounts unless the coverage is rejected in writing; statutory exceptions may apply.
Indiana’s underinsured-vehicle test
Indiana Code § 27-7-5-4(b)[3] defines an underinsured motor vehicle, subject to the terms and conditions of the coverage, as an insured motor vehicle for which the limits available for payment to the insured under all bodily-injury liability policies covering persons liable to the insured are less than the insured’s UIM limits at the time of the accident. The definition does not include an uninsured motor vehicle under subsection (a).
In words, first identify every bodily-injury liability policy covering a person liable to the insured. Then determine the coverage available for payment to this insured under all of those policies. Compare that available amount with the insured’s UIM limit at the accident time.
The vehicle meets the statutory comparison only when the available amount is lower than the UIM limit. Damages exceeding the available liability amount do not replace that statutory comparison.
Available for payment
Indiana’s statutory text uses the limits available for payment to the insured under all bodily-injury liability policies covering persons liable to that insured. The inquiry therefore accounts for every such policy, while focusing on the amount available to this insured.
An official Indiana Supreme Court opinion in Lakes v. Grange Mutual Casualty Co.[4] reaffirms Corr and holds that a vehicle was underinsured because the amount actually paid to the insured was less than the per-person limit of the insured’s UIM coverage. Shared liability proceeds can therefore reduce the amount available for payment to an insured.
The statutory vehicle definition is a threshold question and remains subject to the UIM coverage’s terms and conditions. In a broader collision claim, the Fort Wayne car accident guide explains how insurance coverage fits with fault, damages, and claim evidence.
A 2026 example: a settlement split between parents
In Best v. Standard Fire Insurance Co., decided by the Indiana Court of Appeals on September 11, 2026[5], a 17-year-old passenger was killed when an oncoming driver crossed the center line. The at-fault driver’s insurer paid its full $100,000 per-person bodily-injury limit, split equally between the teen’s parents: $50,000 each. The mother was an insured under two other auto policies, and each carried UIM coverage with a $100,000 per-person limit.
Both UIM insurers argued that the at-fault car was not underinsured because the total paid for the death, $100,000, equaled their UIM limits. The court disagreed. Relying on the Indiana Supreme Court’s decisions in Corr v. American Family Insurance and Lakes, it held that the comparison uses what the claimant actually received from the at-fault driver’s policy, here the mother’s $50,000, not the combined amount paid to everyone. Because $50,000 was less than the $100,000 UIM limits, the car was underinsured.
The court reversed the dismissal of her claim and sent the case back for entry of partial summary judgment that she is entitled to $50,000 in UIM benefits, leaving the trial court to decide which insurer or insurers must pay. The court also distinguished an earlier decision, Hanna v. Indiana Farmers Mutual Insurance Co., in which parents insured under one shared policy could not each claim a separate per-person limit for one child’s death.
Two cautions. Best is a Court of Appeals decision, and a party may ask the Indiana Supreme Court to review it. And the answer in any claim still depends on the specific policies, who qualifies as an insured under each, and how the liability payment was actually allocated. That is why settlement allocation records belong in the file.
Documents to gather
Before asking counsel to review the comparison, it can help to collect:
- Policy declarations
- UM/UIM endorsements
- Liability-limit disclosures
- Claimant allocation records
- Insurer correspondence
Comparison scenarios
These word-based scenarios apply Indiana Code § 27-7-5-4[1](b) without assuming invented dollar figures.
Available amount lower than the UIM limit
After accounting for all bodily-injury liability policies covering persons liable to the insured, the amount available for payment to the insured is lower than the insured’s UIM limit. The insured vehicle meets the statutory comparison unless it is an uninsured motor vehicle under subsection (a), and the definition remains subject to the UIM coverage’s terms and conditions.
Available amount equal to the UIM limit
After accounting for all such liability policies, the amount available to the insured equals the insured’s UIM limit. Because the available amount is not less than the UIM limit, the insured vehicle does not meet the statutory comparison.
Shared liability amount lower for this insured
Several liability claimants share the proceeds, leaving the amount actually available to this insured under all bodily-injury liability policies covering liable persons lower than the insured’s UIM limit. The lower amount available to this insured is used in the statutory comparison.
The UM/UIM boundary
| Coverage | Boundary question | Indiana description |
|---|---|---|
| UM | Does subsection (a) define the vehicle as uninsured? | Indiana Code § 27-7-5-4[1](a) specifies several circumstances within the uninsured-motor-vehicle definition. Related: see the companion UM guide. |
| UIM | Is the total available liability amount lower than the insured’s UIM limit? | Indiana Code § 27-7-5-4[1](b) uses coverage available under all bodily-injury liability policies covering persons liable to the insured and excludes vehicles defined as uninsured by subsection (a). |
Policy rules
Indiana Code § 27-7-5-2[6] generally requires qualifying Indiana motor-vehicle liability policies to provide UM and UIM coverage in statutory amounts unless the coverage is rejected in writing. The section contains qualifications and exceptions, and it provides that insurers may not sell or provide UIM coverage in limits below $50,000.
The Indiana Department of Insurance auto-insurance page[7] states that newly written Indiana auto liability policies include UM and UIM coverage unless rejected in writing and lists $50,000 as the minimum UIM bodily-injury limit. Related: see the companion guide.
Frequently asked questions
Are damages above the other driver’s limit enough to make the vehicle underinsured?
No. Indiana compares the amount available to the insured under all bodily-injury liability policies covering persons liable to the insured with the insured’s UIM limit. Damages alone do not establish the statutory definition.
What if the available liability coverage equals my UIM limit?
Equal amounts do not satisfy the statute’s “less than” comparison.
Can a shared liability amount affect the comparison?
Yes. The Indiana Supreme Court has held that shared liability proceeds can reduce the amount actually available for payment to an insured below the insured’s UIM limit, satisfying the statutory comparison.
If a settlement for a child’s death is split between the parents, which amount counts?
Under the Court of Appeals’ September 2026 decision in Best v. Standard Fire Insurance Co., the parent bringing the UIM claim compares the share that parent actually received, not the combined payment, with the per-person UIM limit. The decision may still be reviewed by the Indiana Supreme Court, and the result depends on the policies involved.
Does every Indiana driver have UIM coverage?
No. For qualifying policies, Indiana Code § 27-7-5-2[2] permits the coverage to be rejected in writing, and statutory exceptions may apply.
Does meeting the definition ensure UIM payment?
No. Indiana Code § 27-7-5-4[1](b) makes the definition subject to the terms and conditions of the coverage.
If you want help reading a particular policy, you may request a case evaluation.
About: Chad E. Delventhal and our Fort Wayne team.
This article provides general information, not legal advice.
Sources
- Indiana Code § 27-7-5-4 (iga.in.gov) ↩
- Indiana Code § 27-7-5-2 (iga.in.gov) ↩
- Indiana Code § 27-7-5-4(b) (iga.in.gov) ↩
- official Indiana Supreme Court opinion in Lakes v. Grange Mutual Casualty Co. (public.courts.in.gov) ↩
- Best v. Standard Fire Insurance Co., decided by the Indiana Court of Appeals on September 11, 2026 (public.courts.in.gov) ↩
- Indiana Code § 27-7-5-2 (iga.in.gov) ↩
- Indiana Department of Insurance auto-insurance page (secure.in.gov) ↩
