CHAPTER 3. AIRCRAFT FINANCIAL RESPONSIBILITY ACT
IC 8-21-3
Chapter 3. Aircraft Financial Responsibility Act
IC 8-21-3-1
Definitions
Sec. 1. The following words and phrases when used in thischapter shall, for the purpose of this chapter, unless a differentmeaning appears from the context, have the following meanings:
(1) The singular shall include the plural; the masculine shallinclude the feminine and neuter, as requisite.
(2) "Aircraft" means any contrivance now known, or hereafterinvented, used or designed for navigation of or flight in the air.
(3) "Aircraft accident" means any mishap involving an aircraftresulting in injury or damage to such aircraft or to any person,property or thing.
(4) "Department" refers to the Indiana department oftransportation; and "state" or "this state" means the state ofIndiana.
(5) "Guest" means any person who rides in an aircraft for whichno charge is made for such ride or flight.
(6) "Insured" means the person in whose name there is issuedan aircraft liability policy (as defined in section 12 of thischapter) and any other person insured under the terms of suchpolicy.
(7) "Judgment" means any judgment, except a judgmentrendered against this state or any political subdivision thereofor any municipality therein, which shall have become final byexpiration without appeal of the time within which appeal mighthave been perfected, or by final affirmation on appeal, renderedby a court of competent jurisdiction of any state or of theUnited States.
(8) "Operation of aircraft" or "operate aircraft" means the useof aircraft for the purpose of air navigation, and includes thenavigation or piloting of aircraft. Any person who causes orauthorizes the operation of aircraft, whether with or without theright of legal control (in the capacity of owner, lessee, orotherwise) of the aircraft, shall be deemed to be engaged in theoperation of aircraft within the meaning of the statutes of thisstate.
(9) "Operator" means any person who is in actual physicalcontrol of an aircraft.
(10) "Owner" means any person in whose name the aircraft iscertificated, licensed, or registered by appropriate federal orstate authority.
(11) "Passenger" means any person in, on or boarding anaircraft for the purpose of riding therein, or alighting therefrom,following a flight or attempted flight therein.
(12) "Person" means any individual, firm, partnership,corporation, company, limited liability company, association,joint stock association, or body politic; and includes any trustee,
receiver, assignee, or other similar representative thereof.
(13) "Policy" or "insurance policy" means an aircraft liabilitypolicy conforming to section 12 of this chapter.
(Formerly: Acts 1951, c.267, s.1; Acts 1953, c.85, s.1.) As amendedby Acts 1980, P.L.74, SEC.316; P.L.18-1990, SEC.156; P.L.8-1993,SEC.148.
IC 8-21-3-2
Proof of financial responsibility
Sec. 2. The department may require proof of financialresponsibility for a period of one (1) year in the manner provided forin this chapter.
(Formerly: Acts 1951, c.267, s.2.) As amended by Acts 1980, P.L.74,SEC.317.
IC 8-21-3-3
Report of accidents
Sec. 3. Any person who, while operating any aircraft, shall havebeen involved in any aircraft accident in this state resulting in bodilyinjury or death, or in damage to property of another in excess of onehundred dollars ($100) or the owner of such aircraft, shall within ten(10) days following such aircraft accident report the same to thedepartment. Aircraft accident reports, as herein required, shall besubmitted in such form as the department may prescribe.
(Formerly: Acts 1951, c.267, s.3; Acts 1953, c.85, s.2.) As amendedby Acts 1980, P.L.74, SEC.318.
IC 8-21-3-4
Reports; security
Sec. 4. (a) The department may require, within not less than ten(10) days nor more than sixty (60) days after an aircraft accidentfrom any person, who, while operating any aircraft shall have beeninvolved in any aircraft accident resulting in bodily injury or deathto any person other than a guest passenger of such aircraft or indamage to property of another, other than property owned, rented,occupied, or used by, or in the care, custody or control of the owneror operator or carried in or on the aircraft, in excess of one hundreddollars ($100), or, in the discretion of the department, the owner ofsuch aircraft, or both, secured sufficient in the discretion of thedepartment to indemnify the injured party against loss and guaranteethe payment and satisfaction of any judgment or judgments fordamages resulting from such accident as may be recovered againstsuch owner or operator by or on behalf of the injured person or hislegal representative, and in addition thereto, the department mayrequire such operator, or in the department's discretion, the owner ofsuch aircraft, or both, to file proof of financial responsibility for aperiod of one (1) year following the date of the accident: Provided,however, that if such owner operator shall satisfy the department thatthe liability, if any, for damages resulting from such accident isinsured by an insurance policy or bond, the department shall not
require security from such owner operator.
(b) Such security, where ordered, shall be in such form and insuch amount as the department may require, but in no case in excessof the amount of proof required by section 8 of this chapter. Thedepartment may modify the amount of security ordered in any case,if after further investigation it shall determine that the amountordered is improper.
(Formerly: Acts 1951, c.267, s.4; Acts 1953, c.85, s.3.) As amendedby Acts 1980, P.L.74, SEC.319.
IC 8-21-3-5
Injunction of operation of aircraft
Sec. 5. If the person required to furnish proof of financialresponsibility in the future or if the person required to furnishfinancial security under this chapter, neglects or refuses to complywith such requirements, the department, the attorney general or theprosecuting attorney of the county in which such party resides, may,in accordance with the laws of the state of Indiana governinginjunctions, maintain an action in the name of the state of Indiana toenjoin such person neglecting or refusing to comply with thefinancial responsibility or security requirements of this chapter fromengaging in the operation of any aircraft or causing to be operatedany aircraft within this state until such person has complied withsuch requirements or until such person has, by final judicialdetermination, been proved not legally liable for, or has beenreleased from all liability for damages resulting from such aircraftaccident.
(Formerly: Acts 1951, c.267, s.5.) As amended by Acts 1980, P.L.74,SEC.320.
IC 8-21-3-6
Payment from security deposit; information regarding security
Sec. 6. (a) Security furnished in compliance with the requirementsof this chapter shall be placed by the department in the custody of thetreasurer of state and shall be applicable only to the payment of ajudgment against the depositor for damages arising out of theaccident in question in an action at law in a court of this state begunnot later than one (1) year after the date of such accident or, uponassignment of the depositor. All such payments made out of thedeposited security shall be made as follows:
(1) Payment shall first be made to each of the judgmentcreditors in the order of judgment entry and to each of theclaimants who have agreed to settle their claims, whosedamages were evaluated by the department, in an amount notgreater than the amount fixed in their respective evaluations.
(2) Whenever the department shall be given evidence,satisfactory to it, that the amounts of all claims for damagesagainst the depositor arising out of such accident are fixed,either by judgment or settlement agreement, payment shall bemade out of any balance remaining after the first distribution to
each of those persons whose judgments or settlement amountshave not been fully paid but whose damages were evaluated bythe department, in proportion to the amounts of their respectiveevaluations unless there is a sufficient amount to make paymentin full.
(3) Any balance remaining after the first and seconddistributions are completed shall be paid to those judgmentcreditors and those claimants who have agreed to settle theirclaims but whose damages were not evaluated, in proportion tothe amounts of their respective judgments or settlementamounts unless there is a sufficient amount to make payment infull.
Such deposit, or any balance thereof, shall be returned to thedepositor or his personal representative whenever after the expirationof such year the department shall be given evidence, satisfactory toit, that there is no such judgment unsatisfied and that there is nopending action against the depositor for damages arising out of suchaccident.
(b) Neither the action taken by the department pursuant to thischapter, the findings, if any, of the department upon which suchaction is based, nor the security filed by the owner or operator asprovided in this chapter shall be referred to in any way, nor be anyevidence of the negligence or due care of either party at the trial ofany action at law to recover damages.
(c) In lieu of deposit of security when required pursuant to thischapter the aircraft owner or operator may, if the person who hassustained bodily injury, including death, or damage to his propertyor his legal representative consents, effect and deliver a consentjudgment or release for such amount and payable when and in suchinstallments as the judgment creditor or claimant may agree to. In theevent the judgment debtor fails to pay any installment as agreed, thenupon notice of such default, the department, the attorney-general, orthe prosecuting attorney may pursuant to section 5 of this chaptermaintain an action to enjoin such person from engaging in theoperation of any aircraft or causing to be operated any aircraft withinthis state until such judgment is appropriately satisfied as requiredherein.
(d) Information regarding security taken under this section shallbe available to the person injured or the representative of any personkilled and their duly authorized agents or attorney.
(Formerly: Acts 1951, c.267, s.6.) As amended by Acts 1980, P.L.74,SEC.321; P.L.1-1993, SEC.51.
IC 8-21-3-7
Nonresidents
Sec. 7. (a) The provisions of this chapter shall apply to any personwho is not a resident of this state under the same circumstances asthey would apply to a resident, and, in such event, such a nonresidentshall not operate any aircraft in this state nor shall any aircraft ownedby him be operated in this state, unless and until such nonresident, or
the owner of the aircraft, if another person, has complied with therequirements of this chapter with respect to security and proof offinancial responsibility covering such aircraft.
(b) The operation by a nonresident, or by his duly authorizedagent, of an aircraft in this state shall be deemed equivalent to anappointment by such nonresident of the secretary of state, or hissuccessor in office, to be his true and lawful attorney upon whommay be served all lawful processes in any action or proceedingagainst him, growing out of any aircraft accident in which suchnonresident may be involved while so operating or so permitting tobe operated an aircraft in this state, and such operation shall besignification of his agreement that any such process against him,which is so served, shall be of the same legal force and validity as ifserved upon him personally. Such action may be filed in the countyof the residence of the plaintiff or in the county where the accidentoccurred, at the election of the plaintiff, and service of such processshall be made by leaving a copy thereof, with a fee of two dollars($2), for such defendant to be served, with the secretary of state, orin his office, and such service shall be sufficient service upon suchnonresident, provided that notice of such service and a copy of theprocess are forthwith sent by registered mail to the defendant and thedefendant's return receipt is appended to the original process andfiled therewith in the court. In the event that the defendant refuses toaccept or claim such registered mail, then such registered mail shallbe returned by the secretary of state to the plaintiff or to his attorney,and the same shall be appended to the original process, together withan affidavit of the plaintiff or of his attorney or agent to the effectthat such summons was delivered to the secretary of state, togetherwith a fee of two dollars ($2), and was thereafter returned unclaimedby the postoffice department, and such affidavit, together with thereturned affidavit including said summons, shall be consideredsufficient service upon such nonresident defendant. The court inwhich the action is brought may order such continuances as may bereasonable to afford the defendant opportunity to defend the action.
(c) No insurance policy or bond shall be effective under section4 of this chapter in the case of an aircraft owned or operated by anonresident in this state at the time of the accident or at the effectivedate of the policy or bond, or the most recent renewal thereof, unlessthe insurance company or surety company, if not authorized to dobusiness in this state, shall execute a power of attorney authorizingthe secretary of state to accept service on its behalf of notice orprocess in any action upon such policy or bond arising out of suchaccident.
(Formerly: Acts 1951, c.267, s.7; Acts 1953, c.85, s.4.) As amendedby P.L.66-1984, SEC.137.
IC 8-21-3-8
Proof of financial responsibility defined
Sec. 8. Proof of financial responsibility shall mean proof of abilityto respond in damages for liability thereafter incurred, arising out of
the ownership, maintenance or use of an aircraft, in the amount of tenthousand dollars ($10,000) because of bodily injury to or death ofany one (1) person, and, subject to said limit respecting one (1)person, in the amount of twenty thousand dollars ($20,000) becauseof bodily injury or death of two (2) or more persons in any one (1)accident, and in the amount of twenty thousand dollars ($20,000)because of injury to or destruction of property in any one (1)accident. Such proof in such amounts shall be furnished for eachaircraft owned by such person and operated in this state.
(Formerly: Acts 1951, c.267, s.8.)
IC 8-21-3-9
Methods of proof
Sec. 9. Proof of financial responsibility when required under thischapter may be given by the following alternate methods, either byproof:
(1) that a policy or policies of aircraft liability insurance havebeen obtained and are in full force and effect;
(2) that a bond has been duly executed; or
(3) that deposit has been made of money or securities;
all as provided in this chapter.
(Formerly: Acts 1951, c.267, s.9.) As amended by P.L.66-1984,SEC.138.
IC 8-21-3-10
Filing of insurance certificates
Sec. 10. (a) Proof of financial responsibility may be made byfiling with the department the written certificate or certificates of anyinsurance carrier certifying that it has issued to or for the benefit ofthe person furnishing such proof and named as the insured, anaircraft liability policy or policies meeting the requirements of thischapter, and such other information as the department may require.
(b) When the person required to give proof of financialresponsibility, is not the owner of an aircraft, then an operator'spolicy of liability insurance as defined in this chapter shall besufficient proof of financial responsibility.
(Formerly: Acts 1951, c.267, s.10.) As amended by Acts 1980,P.L.74, SEC.322.
IC 8-21-3-11
Default of foreign insurance carrier
Sec. 11. If any foreign insurance carrier which has furnished proofof financial responsibility defaults in any said undertakings oragreements, the department shall not thereafter accept any certificateof said carrier whether theretofore filed or thereafter tendered asproof of financial responsibility so long as such default continues.
(Formerly: Acts 1951, c.267, s.11.) As amended by Acts 1980,P.L.74, SEC.323.
IC 8-21-3-12 "Aircraft liability policy" defined
Sec. 12. An aircraft liability policy as said term is used in thischapter, shall mean an owner's policy of liability insurance or anoperator's policy of liability insurance for which a certificate hasbeen filed with the department by an insurance carrier authorized todo business in this state pursuant to the insurance laws of this statefor the benefit of the person named therein as insured; which policyshall contain the terms, conditions and provisions required by thelaws of this state and with sufficient liability coverage to meet thesecurity and proof of financial responsibility requirementsestablished within the purview of section 4 and pursuant to thischapter by the department as a result of an aircraft accident occurringwithin this state and shall be approved by the insurancecommissioner of the state of Indiana.
(Formerly: Acts 1951, c.267, s.12; Acts 1953, c.85, s.5.) As amendedby Acts 1980, P.L.74, SEC.324.
IC 8-21-3-13
Certificate of issuance of insurance policy
Sec. 13. An insurance carrier which has issued an aircraft liabilitypolicy or policies meeting the requirements of this chapter shall,upon request of the named insured, deliver to such insured for filingor at the request of such insured shall file direct with the department,an appropriate certificate showing that such policy or policies havebeen issued, which certificate shall meet the requirements of thischapter. The issuance of a certificate to serve as proof of financialresponsibility under this chapter shall be conclusive evidence thatevery aircraft liability policy therein cited conforms to all therequirements of this chapter.
(Formerly: Acts 1951, c.267, s.13.) As amended by Acts 1980,P.L.74, SEC.325.
IC 8-21-3-14
Notice of cancellation
Sec. 14. When an insurance carrier has certified an aircraftliability policy under this chapter for the purpose of furnishingevidence of future financial responsibility, it shall give ten (10) days'written notice to the department before effecting a cancellation ofsuch policy and the policy shall continue in full force and effect untilthe date of such cancellation specified in such notice or until itsexpiration.
(Formerly: Acts 1951, c.267, s.14.) As amended by Acts 1980,P.L.74, SEC.326.
IC 8-21-3-15
Bond giving proof of financial responsibility
Sec. 15. (a) A person required to give proof of financialresponsibility may file with the department a bond meeting therequirements of this section. Such bond shall be executed by theperson giving such proof and by a surety company duly authorized
to transact business in this state pursuant to the laws of this state.
(b) The department shall not accept any such bond unless it isconditioned for payments in amounts and under the samecircumstances as would be required in an aircraft liability policyfurnished by the person giving such proof under this chapter.
(c) No such bond shall be cancelled unless ten (10) days' priorwritten notice of cancellation is given the department butcancellation of such bond shall not prevent recovery thereon withrespect to any right or cause of action arising prior to the date ofcancellation.
(d) If a judgment is rendered against the principal of any suchsurety bond upon a liability covered by the conditions of such bondand such judgment is not satisfied within sixty (60) days after itbecomes final, the department may require the judgment creditor tobring an action or actions, at his sole expense, against the companyor person which executed such bond for the recovery of saidjudgment.
(Formerly: Acts 1951, c.267, s.15; Acts 1953, c.85, s.6.) As amendedby Acts 1980, P.L.74, SEC.327.
IC 8-21-3-16
Deposit with treasurer giving proof of financial responsibility
Sec. 16. (a) A person may give proof of financial responsibility bydelivering to the department a receipt of the treasurer of this stateshowing a deposit with said treasurer of an amount consistent withthe provisions of section 8 of this chapter in cash or of securitiessuch as may legally be purchased at savings banks or for trust fundsof a market value in the full amount required.
(b) All moneys or securities so deposited shall be subject toexecution to satisfy any judgment mentioned in this chapter orsettlement agreed upon, but shall not otherwise be subject toattachment or execution.
(c) The state treasurer shall not accept any such deposit or issuea receipt therefor, and the department shall not accept such receipt,unless accompanied by evidence that there are no unsatisfiedjudgments of record against the depositor in the county where thedepositor resides, for which he is not exempt.
(Formerly: Acts 1951, c.267, s.16.) As amended by Acts 1980,P.L.74, SEC.328.
IC 8-21-3-17
Substitution of proof of financial responsibility
Sec. 17. The department shall cancel any bond or return anycertificate of insurance, or the department shall direct and the statetreasurer shall return any money or securities, to the person entitledthereto, upon the substitution and acceptance of other adequate proofof financial responsibility pursuant to this chapter.
(Formerly: Acts 1951, c.267, s.17.) As amended by Acts 1980,P.L.74, SEC.329.
IC 8-21-3-18
Inadequate security; requiring alternative security
Sec. 18. Whenever any proof of financial responsibility filed byany person under this chapter no longer fulfills the purpose for whichrequired, the department shall, for the purpose of this chapter, requireother proof of financial responsibility as required by this chapter.
(Formerly: Acts 1951, c.267, s.18.) As amended by Acts 1980,P.L.74, SEC.330.
IC 8-21-3-19
Cancellation; waiver of proof of financial responsibility
Sec. 19. The department shall upon request cancel any bond orreturn any certificate of insurance, or the department shall direct andthe state treasurer shall return to the person entitled thereto anymoney or securities, deposited pursuant to this chapter as proof offinancial responsibility or waive the requirement of filing proof offinancial responsibility when the purposes for the requiring of suchproof have been satisfied.
(Formerly: Acts 1951, c.267, s.19.) As amended by Acts 1980,P.L.74, SEC.331.
IC 8-21-3-19.5
Aircraft rental; notice of insurance coverage
Sec. 19.5. (a) Each person offering an aircraft for rental shall, atthe time the aircraft is rented, provide the renter of the aircraft withwritten notice of the nature and extent of any insurance covering theaircraft as specified in subsection (b).
(b) The form of the notice required by subsection (a) must be asfollows:
NOTICE OF INSURANCE COVERAGE
As a renter of aircraft, you are hereby notified that:
(1) You (are)(are not) (strike phrase not applicable) insuredunder a policy or policies of insurance provided by theundersigned and providing liability coverage to renters ofaircraft. If coverage is provided, it is in the amount of $ _____.
(a) The above insurance is subject to a deductible amount of $_____.
(2) You (are)(are not) (strike phrase not applicable) insured forhull damage to the aircraft. If hull insurance is provided, it is inthe amount of $ ____.
(a) The above insurance is subject to a deductible amount of $____.
(3) Although insurance may be provided for liability or hullcoverage (or both), the undersigned's insurance carrier has fullrights to subrogate against you for any payments it may berequired to make on account of any damage or loss arising outof your operation of the aircraft. It is suggested that you carryinsurance to protect you to partially or fully cover thispossibility.
_________________________________________
(Signature of Person or Officer of
Company Renting Aircraft)
Dated _________________________, 20______
(Month) (Day) (Year)
I acknowledge receipt of this notice of insurance coverage.
Dated ________________________, 20______
(Month) (Day) (Year)
(c) The notice required by this section constitutes a part of a rentalagreement, whether written or oral. Each renter must provide writtenacknowledgment of receipt of the notice.
(d) Receipt of notice under this section constitutes notice for asubsequent rental of the same aircraft to the same person unless theamount of insurance coverage has been reduced or eliminated (asspecified in the original notice), in which case a new notice isrequired.
(e) A person offering an aircraft for rental shall maintain a copyof the notice provided to each renter for at least three (3) years fromthe date of the last rental to that renter.
(f) A person offering an aircraft for rental who fails to providenotice as required by this section commits a Class A infraction.
As added by P.L.120-1989, SEC.1. Amended by P.L.2-2005, SEC.28.
IC 8-21-3-20
Violations; penalties
Sec. 20. A person who fails to submit an accident report to thedepartment as provided in section 3 of this chapter commits a ClassC infraction.
(Formerly: Acts 1951, c.267, s.20.) As amended by Acts 1978, P.L.2,SEC.860; Acts 1980, P.L.74, SEC.332.
IC 8-21-3-21
Construction of chapter
Sec. 21. This chapter shall not be construed to prevent theplaintiff in any action at law from relying upon other security orupon the other processes provided by law.
(Formerly: Acts 1951, c.267, s.22.) As amended by P.L.66-1984,SEC.139.
IC 8-21-3-22
Certificate of self-insurance
Sec. 22. (a) The department may, in its discretion, upon theapplication of such a person issue a certificate of self-insurance whenit is reasonably satisfied that such person is possessed of and willcontinue to be possessed of financial ability to respond to judgments,as hereinbefore described, obtained against such person, arising outof the ownership, maintenance, use or operation of any such person'saircraft.
(b) Upon not less than five (5) days' notice and a hearing pursuantto such notice, the department may, in its discretion and upon
reasonable grounds, cancel a certificate of self-insurance.
(Formerly: Acts 1951, c.267, s.24.) As amended by Acts 1980,P.L.74, SEC.333.
IC 8-21-3-23
Title
Sec. 23. This chapter shall be known and may be cited as theIndiana Aircraft Financial Responsibility Act.
(Formerly: Acts 1951, c.267, s.25.) As amended by P.L.66-1984,SEC.140.