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Teen Driver Insurance in Indiana: A Parent's Guide

Indiana requires 25/50/25 liability coverage and is an at-fault state.

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Indiana at a Glance

25/50/25

Minimum liability limits, in thousands of dollars (per person / per accident / property)

At-fault

The at-fault driver's insurance pays for the damage they cause

Optional

PIP and uninsured motorist coverage are not required by law

Minimum learner's permit age, 50 supervised driving hours

Source: state DMV, insurance department and statute records, verified July 2026

State Requirements

The state operates a three-stage graduated driver licensing (GDL) system: learner's permit at age 15, probationary license at 16 with passenger and nighttime restrictions, and unrestricted license at 18 (or age 21 if violations occur during the probationary period). Indiana Code 27-1-37-5 mandates that all auto insurers offer a good student discount to drivers under 25 who maintain a B average or equivalent, making this one of the few state-required teen discounts. While these minimums satisfy legal requirements, parents adding a teen driver should evaluate whether higher liability limits make sense given the increased exposure that comes with an inexperienced driver.

Bodily Injury Liability

Covers injuries your teen causes to others in an at-fault accident.

Property Damage Liability

Pays for damage your teen causes to another person's vehicle or property.

Uninsured/Underinsured Motorist Coverage

Indiana law requires insurers to offer uninsured and underinsured motorist coverage, though you can decline it in writing. Given that teen drivers are statistically more likely to be involved in accidents, this coverage provides important protection for medical bills and vehicle damage when the at-fault driver can't pay.

Collision Coverage

Pays to repair or replace your teen's vehicle after an accident, regardless of fault. For a newer or financed vehicle, collision is typically required by the lender and provides essential financial protection given teen drivers' elevated accident rates.

Comprehensive Coverage

Covers non-collision damage to your teen's vehicle—theft, vandalism, hail, deer strikes, and other perils common in Indiana. Like collision, this makes the most financial sense for newer vehicles or when required by a lender. For an older paid-off vehicle, evaluate whether the annual premium justifies the coverage, keeping in mind that comprehensive claims (especially deer collisions, frequent in rural Indiana counties) typically don't increase rates as much as at-fault accidents.

Cost Overview

$203–$388/mo

Typical monthly rate in Indiana, adding a driver aged 16–19 to a parent's policy

Rate data: Insurify and ValuePenguin, 2025

What Affects Your Rate

This discount usually remains available through age 25 or college graduation.
Telematics programs: Major carriers operating in Indiana offer usage-based insurance programs that monitor braking, acceleration, mileage, and nighttime driving.
Indiana's Bureau of Motor Vehicles maintains a list of approved providers, and the discount often applies for three years after course completion.
Probationary license restrictions: Indiana's nighttime curfew (no unsupervised driving 10 p.m.–5 a.m. for the first six months, then 11 p.m.–5 a.m.) and passenger limits (no more than one passenger under 25 for the first year, except family) reduce exposure during the highest-risk driving scenarios, which some carriers factor into teen driver pricing.

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Rules for new drivers

Night driving

graduated; ~10pm/11pm-5am

Passengers

no passengers first 180 days (family exempt)

Source: IIHS and state DMV records, verified July 2026

Frequently Asked Questions

What are the graduated licensing rules in Indiana and when does my teen get a full license?

Indiana's graduated driver licensing system has three stages: learner's permit at age 15 (50 hours supervised driving required, including 10 at night), probationary license at age 16 with restrictions (nighttime curfew of 10 p.m.–5 a.m. for first six months, then 11 p.m.–5 a.m.; passenger limit of one non-family member under 25 for the first year), and unrestricted license at age 18 if no violations occurred during the probationary period. If your teen receives moving violations or license suspensions during the probationary period, full licensing can be delayed until age 21.

Can my teen get insurance if they only have a learner's permit in Indiana?

Yes, teens with learner's permits should be listed on the parent's policy even though they're only driving with supervision. Most carriers don't charge the full teen driver surcharge during the learner's permit phase (age 15–16 in Indiana) since the supervised driving requirement substantially reduces risk, but your teen must still be disclosed to maintain coverage. The significant rate increase typically occurs when your teen receives the probationary license at age 16 and begins unsupervised driving.

Coverage Types

Add to Parent Policy vs Separate Policy

In nearly all cases, adding your teen to your existing policy costs significantly less than purchasing a separate policy in their name. Multi-car and multi-driver discounts on the parent policy, combined with the parent's established driving history, typically result in total household premiums $1,200–$2,500 lower annually than maintaining two separate policies.

Liability Limits for Teen Drivers

Many parents increase liability limits to $100,000/$300,000/$100,000 or higher when adding a teen driver, recognizing that inexperienced drivers pose greater lawsuit exposure. The cost difference between state minimum and substantially higher limits is often only $15–$40/month, while the financial protection can be the difference between an insurance payout and tapping home equity or college savings.

Full Coverage for Older Vehicles

Full coverage (liability, collision, and comprehensive) makes financial sense when the vehicle's value substantially exceeds the annual premium plus deductible. For teen drivers in vehicles worth less than $5,000, many parents carry only liability and pocket the $800–$1,500 annual savings from dropping collision and comprehensive, effectively self-insuring against vehicle damage.

Telematics Programs for Teen Drivers

Usage-based insurance programs use a smartphone app or plug-in device to monitor driving behavior—hard braking, rapid acceleration, speeding, and nighttime driving. Teen drivers who consistently demonstrate safe habits can earn discounts of 15–30%, and many parents value the coaching and visibility features that allow them to discuss specific driving events with their teen.

Distant Student Discount

If your teen attends college more than 100 miles from home and doesn't take a vehicle to campus, most carriers offer a distant student discount of 10–35%. The student remains covered when driving a family vehicle during breaks, but the reduced exposure (no daily commute, no vehicle access most of the year) justifies substantially lower premiums.

Medical Payments Coverage

Medical payments coverage (MedPay) pays medical expenses for you and your passengers after an accident, regardless of fault, typically in amounts from $1,000–$10,000. For teen drivers, MedPay provides immediate coverage for emergency room visits, ambulance transport, and initial treatment without waiting for liability determination—particularly valuable if your teen's passengers are injured.