Car Loans and Liability Insurance
Indiana Insurance Doesn’t Have to Be Intimidating
Buying a car is a major step. Between figuring out monthly payments, down payments, and what you can afford, there’s a lot to think about. But you might not think about insurance until the last minute.
Whether you’re paying cash or shopping at a car lot, it’s crucial to understand what kind of insurance your situation calls for. Indiana has specific rules about what you need to legally hit the road — and if you’re paying back a car loan, the bar is set a little higher..
Let’s break it all down so you’re not caught off guard when it’s time to sign the paperwork and drive away.
Minimum Insurance Requirements in Indiana
First up: if you’re buying a car outright — meaning no loan, no lienholder, just you and your wallet — then you’ll just need to meet Indiana’s state minimum liability insurance. This coverage is designed to protect other people if you're in an accident.
Here’s what Indiana law requires:
Bodily injury liability: $25,000 per person / $50,000 per accident
Property damage liability: $25,000
Uninsured/underinsured motorist coverage: Usually bundled in, but can be declined in writing.
Basically, liability insurance covers the cost of injuries or damage you cause to others, but it won’t cover damage to your vehicle nor medical payments for you.
This kind of coverage works fine if you’ve bought your car in full, and you’re willing to cover repair or replacement costs out of pocket if something happens. But that changes if you have a car loan.
Insurance Requirements for Car Loans
Okay, now let’s talk car loans. If you're buying your car with the help of a lender, whether it's your bank, a credit union, or a buy here pay here dealership, your insurance needs an upgrade.
That car isn’t technically all yours yet. The lender still has skin in the game, and they want to make sure their investment is protected if the unexpected happens.
That means you’ll likely be required to carry full coverage insurance, which includes:
Liability: Required by the state.
Collision: Covers your car if you’re in an accident, regardless of who’s at fault.
Comprehensive: Covers non-collision events like theft, vandalism, fire, hail, or even a rogue deer.
Full coverage protects both you and the lender. It’s peace of mind in case something goes sideways, and it's usually non-negotiable when there’s a loan involved. This can go for no credit check car loans and bad credit car loans, as well as a loan from a bank. Don’t be caught without it; your lender will probably ask for proof.
Collateral Protection Insurance (CPI)
If you’re financing your car and drop your full coverage (or let it lapse), your lender won’t just shrug it off. In most cases, they’ll either:
Force-place insurance. This means they’ll add a policy for you and roll the cost into your monthly loan payment. Spoiler: it’s way more expensive than shopping around on your own.
Consider you in default. Even if you’re making your car payments on time, not having the right insurance can break your loan agreement, and put your vehicle at risk of repossession.
Bottom line: don’t skimp on full coverage if you’re still paying off your ride. It’s there to protect you and your wallet.
High-Risk Insurance Options: Indiana Auto Insurance Plan (IN AIP)
As previously stated, drivers in Indiana are required by law to carry liability coverage. But what if you can’t get insurance? If you’re a “high risk” driver, insurers may reject you.
High risk drivers can be people who exhibit these behaviors:
Multiple traffic violations
OWIs (operating while intoxicated)
History of reckless driving, distracted driving, speeding, or racing
One or more at-fault accidents
Multiple speeding tickets or citations
Keeping in mind that not everyone can get coverage, Indiana allows residents to take advantage of an IN AIP. To qualify for IN AIP, a driver must show rejections from three Indiana automobile insurance companies within the previous 60 days.You have to have both a valid driver’s license and a car registered in Indiana. Your application will be reviewed, and you'll be assigned to an insurance company.
Car Loans for All Credit Types
When it comes to securing your car loan, keep in mind Quick Auto doesn’t offer no credit car loans. We check credit, but a credit score is not a deciding factor in lending. Quick Auto offers flexibility and guidance for all types of borrowers. Even if you have bad credit or no credit, there are financing options available that will work with your situation and whether you're rebuilding, starting fresh, or just need reliable transportation fast.
Visit a Quick Auto location to explore affordable financing options and drive away with confidence, peace of mind, and a fresh start.
