Minimum Limits, Comparative Fault, and the Underinsured Motorist Claim in an Indiana Intersection Crash
Nathan Cole, 23, lives with his parents in Indianapolis and is a listed driver on their auto policy: liability limits of 25/50/25 - Indiana's minimum - with uninsured/underinsured motorist limits of 100/300, $5,000 medical payments, and a $500 deductible. In August, Nathan ran a red light and struck a car driven by Priya Raman. Priya's medical bills, lost wages, and pain and suffering total $180,000; a police reconstruction puts her 20% at fault for speeding. Priya's passenger suffered minor injuries totaling $4,000. Priya carries her own policy with 100/300 liability and 100/300 UM/UIM. Nathan's parents assumed their $250,000 limits would cover everything and are stunned when Priya's attorney demands far more than the policy paid. Priya has also filed a UM claim with her own carrier.
1. Given the Cole policy limits, how much does each claimant receive, and what exposure remains for the family?
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Read the limits correctly. 25/50/25 means $25,000 per person and $50,000 per accident for bodily injury, plus $25,000 for property damage. The per-person limit caps all damages because of bodily injury to one person - medicals, wages, and pain and suffering combined.
Priya. Gross damages $180,000. Indiana's modified comparative fault reduces her recovery by her share: 80% x $180,000 = $144,000 recoverable. The policy pays the $25,000 per-person limit - nothing more.
The passenger. $4,000 in damages, fully paid: $4,000. She is under the $25,000 per-person limit, and because the $50,000 per-accident limit is nowhere near exhausted, her payment does not reduce Priya's.
Total paid from the Cole policy: $29,000.
Remaining exposure: $144,000 - $25,000 = $119,000. Nathan is personally exposed for the difference, and his parents as owners of the vehicle face exposure under negligent entrustment or family-purpose theories if the facts support them. The parents' assumption that they had $250,000 of coverage is simply wrong - they bought the statutory minimum.
Had both claimants suffered major injuries, they would have shared $50,000, each capped at $25,000 - a common and painful surprise.
2. How much will Priya collect under her own UM coverage, and why that amount?
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Indiana requires UM coverage, and the statute treats an underinsured vehicle as uninsured. Limits must ordinarily match the policy's liability limits unless the insured rejects the coverage in writing; Priya has 100/300.
The three-step calculation:
- Legally entitled to recover: after comparative fault, $144,000.
- Credit for what the tortfeasor paid: $144,000 - $25,000 = $119,000 uncompensated.
- Apply the UM limit: the lesser of $119,000 and the $100,000 per-person UM limit = $100,000 payable.
Total recovery: $125,000 against $144,000 of recoverable damages - $19,000 still uncompensated, plus the 20% of fault that is hers to bear by design. UM is not a guarantee of full recovery; it is a floor the insured bought for herself.
The passenger is not part of this. Her $4,000 was paid in full by the Cole policy, so she is not underinsured and has no UM shortfall, even though she occupied Priya's vehicle and would be an insured for UM purposes.
Practice point. The credit is for amounts actually paid, not the tortfeasor's stated limits - a common error that underpays the insured when the tortfeasor's carrier pays less than its limits.
3. Suppose the reconstruction had placed Priya 55% at fault. What changes, and why does the exact percentage matter?
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Indiana uses modified comparative fault with a 51% bar. A claimant whose fault is greater than 50% recovers nothing. At 55%, Priya's recovery against Nathan is zero - not reduced, eliminated.
Consequences:
- Nathan's liability carrier owes Priya nothing on her bodily injury claim. It still owes the passenger's $4,000, since the passenger's recovery is unaffected by Priya's conduct.
- Priya's UM claim fails. UM pays damages the insured is legally entitled to recover from the underinsured motorist. If the tort bar wipes out the claim, there is nothing for UM to pay - UM follows tort law, it does not override it.
- Exactly 50% is the hinge: at 50% she recovers half; at 51% she recovers nothing. The one-point spread is why accident reconstruction and the citing officer's opinion carry real money.
Contrast worth remembering: a pure comparative state would reduce her recovery to 45% ($81,000) rather than bar it, and a contributory negligence state would bar her at any fault at all. The percentage, not just the existence of fault, drives the outcome in Indiana.