Auto Insurance Basics

Auto Insurance Requirements in Iowa

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Iowa’s Motor Vehicle Financial Responsibility Law states that all drivers with cars registered in the state are expected to carry liability insurance with limits of at least 20/40/15.

You do not need to provide proof of liability insurance when you register your car in Iowa. However, you should have it in place before you start operating on the road, as law enforcements may suspend your license or fine you when you fail to provide valid proof.

Iowa Required Car Insurance CoverageIA Required Min. Limits
Bodily Injury (BI) $20,000 per person / $40,000 per accident
Property Damage (PD) $15,000 per accident

Iowa Car Insurance Minimum Requirements

In Iowa, motorists are required to maintain an auto insurance policy that includes bodily injury and property damage coverage – also referred to as the liability insurance. In the event that you cause an accident, it covers things like the other driver’s medical bills to bumper replacements. These coverages need to at least have the following coverage amounts (limits) in order to fulfill the minimum requirements in the Hawkeye State:

Bodily Injury (BI): each time you are responsible – even just partially – for a car accident in Iowa, your insurer will pay each injured person in the other driver’s car up to $20,000 for his or her medical care. With a minimum policy, your insurer will cover up to $40,000 total per accident when there is more than one person injured in the other party. In case you face a lawsuit for the accident, your BI also covers your lawyer’s fee. In Iowa, you can always opt for higher limits, depending on what your insurer has to offer. 

Property Damage (PD): when you cause an accident, there is likely some kind of property damage on both sides. For the other driver’s loss, such as auto body paint repair and/or headlights replacement, your PD coverage will pay for up to the liability limits of $15,000 for each accident. If the expense ever exceeds $15,000, you may need to pay for the difference on your own, so most agents will suggest purchasing higher limits.

Optional Coverage in Iowa

A minimum policy in Iowa ensures that you have some basic means of covering the harm you may cause to others while driving, but there can be other additional and unexpected costs. For example, you may find yourself in a hit-and-run situation with no driver and insurance information to file a claim with. Here are some optional coverages you will find with most Iowa insurers that give you protection beyond the minimum requirements: 

Uninsured Motorist Bodily Injury (UMBI): in an event where the driver is either uninsured, or unidentifiable (hit-and-run), having UMBI coverage means you can make claims from your own insurer instead. Every insurer licensed in the Hawkeye State must include UMBI in the amounts of 20/40 per accident into your policy whenever you get a new quote. However, since it is not required, you can reject it in writing, although most government officials will recommend you to include it.

Underinsured Motorist Bodily Injury (UIMBI): in case the at-fault driver’s BI coverage is not enough to pay for all of your medical needs, UIMBI can help you. An underinsured driver refers to one whose BI limits are lower than your purchased UIMBI limits (for example, his 20/40 < your 50/100). Your insurer will cover the balance up to the difference between the two limits. This coverage is also automatically included into your new quote unless you reject it in writing.

Alternative Proof of Financial Responsibility

Whenever you are pulled over on the road, or involved in an accident that results in bodily injuries or even death, you may be asked to show proof of insurance. Have your insurance ID card with you at all times as proof. If for some reason you decide against getting an insurance policy, you can use one of the following alternatives from the Department of Transportation (DOT) as proof of your financial responsibility in Iowa: 

Bond Insurance Card: the Director of Iowa's DOT will issue you an insurance card if you either file a valid surety bond or a real estate bond with a value of $55,000 toward accidents you're negligent in. The bond is a promise that in case you cannot pay for the judgments against you for bodily injuries or property damage you cause, another party will serve as back-up. A surety bond means a surety company will pay in your place, and a real estate bond means there two other individuals, who put up their Iowa real estate as collateral in case you fail to satisfy the judgments, will pay. Note that if you wish to file a real estate bond, you need to first have it approved by a court or clerk of the district court where the listed real estate is located.

Security Insurance Card: the Director of Iowa DOT will give you a security insurance card for your registered car(s) if you file an “endorsed certificate of deposit” with the State Treasurer. You can get such a certificate by depositing $55,000 with an Iowa bank, and provide proof that you do not have any unpaid liability from previous accidents, if any.

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