Prejudgment Interest Rules in Indiana
At a glance
| Governing law | Tort actions: IC 34-51-4-1 through -9; qualifying loans, written instruments and accounts: IC 24-4.6-1-102 through -104. |
|---|---|
| Interest rate | Tort: court-set 6%-10% annually (§ 34-51-4-9); listed debt claims: 8% annually absent an agreed rate (§§ 24-4.6-1-102, -103). |
| When interest starts running | Tort: latest applicable statutory trigger, at most 48 months, excluding plaintiff-caused delay (§ 34-51-4-8); written instrument: settlement date; listed account: itemized bill plus demand (§ 24-4.6-1-103). |
| Contract vs. tort claims | Tort chapter applies to civil actions arising from tortious conduct (§ 34-51-4-1), with settlement-offer limits; the separate debt provisions cover their stated loans, instruments and accounts. |
| Mandatory or discretionary | Tort award discretionary (“may,” § 34-51-4-7); qualifying debt interest “shall” accrue at the specified rate under §§ 24-4.6-1-102, -103. |
| Simple or compound | Tort interest expressly simple (§ 34-51-4-9). For loans or forbearances, § 24-4.6-1-104(b)-(d) permits agreed methods and supplies a default that can add past-due interest installments to principal. |
| Claims against the government | Tort chapter does not impose prejudgment-interest liability on the state or political subdivisions (§ 34-51-4-4). |
| Other exceptions | Tort chapter excludes punitive damages and patient-compensation-fund claims (§§ 34-51-4-2, -3); qualifying defendant or plaintiff settlement offers can disapply the chapter (§§ 34-51-4-5, -6). |
Requirements one by one
Tort and debt rules
IC 34-51-4-1 confines the tort chapter to civil actions arising from tortious conduct. IC 34-51-4-7 says a court “may” award interest, and § 34-51-4-9 sets a court-chosen simple rate between 6% and 10% annually. For covered debt, § 24-4.6-1-102 supplies an 8% rate on loans or forbearances when no rate is agreed, while § 24-4.6-1-103 states an 8% rate and accrual conditions for specified writings and accounts.
Timing and settlement offers
Under § 34-51-4-8, tort interest cannot run longer than 48 months. Its start is the latest applicable date among 15 months after claim accrual, six months after court filing for nonmedical-review cases, and 180 days after formation of a medical review panel; the court excludes plaintiff-caused delay. Section 34-51-4-5 disapplies the chapter when a defendant makes a qualifying written offer within nine months of filing, or a longer good-cause period, for at least two-thirds of the eventual award. Section 34-51-4-6 likewise disapplies it when the plaintiff misses or exceeds its specified offer terms.
Interest calculation
Tort interest is expressly simple under § 34-51-4-9. For a loan or forbearance, IC 24-4.6-1-104(b)-(d) permits agreed methods; absent an agreed method, it points to a method that can add past-due interest installments to principal before later interest is computed. This provision prevents a blanket statement that all Indiana debt interest must remain simple.
Government and claim exclusions
IC 34-51-4-4 says the tort chapter does not impose prejudgment-interest liability on the state or a political subdivision. Section 34-51-4-2 excludes claims against the patient’s compensation fund, and § 34-51-4-3 excludes the punitive-damages portion of a judgment.
What trips people up
The 2026 text of § 24-4.6-1-103 changed its cross-reference for excluded written instruments to IC 37-2. That amendment did not change the 8% rate or its stated start dates. In the tort chapter, a sufficient defendant offer prevents the chapter from applying even if the defendant later loses the case.
Common questions
Does tort interest run from the injury date? Section 34-51-4-8 uses later statutory triggers and caps the award period at 48 months.
Can I use the tort rate for an unpaid bill? The tort chapter is limited by § 34-51-4-1; the separate provisions at §§ 24-4.6-1-102 and -103 address listed debt claims.
Statutes and sources
- IC 34-51-4-1 through -9, official 2026 Indiana Code, accessed 2026-10-06: https://iga.in.gov/ic/2026/Title_34/Article_51/Chapter_4.pdf
- IC 24-4.6-1-102 through -104, official 2026 Indiana Code, accessed 2026-10-06: https://iga.in.gov/ic/2026/Title_24/Article_4.6/Chapter_1.pdf
Source links
Every statute quoted above, linked, with the date we checked it.
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