Does Indiana Allow UM/UIM Stacking? What Chapter 27-7-5 Says

By the FigureMyTax Editorial Team · How we calculate

Indiana's statute neither requires nor bans stacking. It lets a policy cap total liability at the highest single limit and sets a formula for the maximum UM or UIM payment.

The offer and rejection

IC 27-7-5-2 requires insurers to make UM and UIM coverage available in limits at least equal to the bodily injury liability limits, unless rejected in writing, with UIM available in limits of not less than $50,000. A named insured may reject both coverages, or either one alone if the other is provided separately, and the rejection binds all other insureds. It must say what is rejected and the date it is effective.

The highest-limit clause

Section 27-7-5-5(a) lets the policy provide that the total limit of all insurers' liability for one accident does not exceed the highest limit under any one policy applicable to the loss, but never below the minimum. Subsection (b) limits single-policy coverage to vehicles for which a UM or UIM premium was charged.

The payment formula

Subsection (c) makes the maximum amount payable for bodily injury the lesser of (1) the per-person limit less the amount paid in damages by or for any person liable for the injury, and (2) your total damages less that amount. So with $100,000 of coverage, $25,000 paid and $250,000 of damages, the maximum is $75,000.

What it leaves open

The text does not say what applies if a policy has no highest-limit term, and we did not read Indiana court decisions on stacking or on "other insurance" clauses. A policy with an anti-stacking term is not proof it will be enforced, and one without it is not proof stacking applies. Ask an attorney.

How to use this

Compare the combined and single-policy results in the Indiana UM/UIM stacking calculator, start with the plain-English stacked versus single-policy explainer, and read how UM and UIM work in Indiana.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Indiana's rules apply to your specific case with a licensed Indiana attorney.