Iowa Auto Insurance

Iowa is one of the few states that does not have a compulsory insurance law. Rather than requiring all drivers to maintain continuous coverage, citizens are protected by the Financial and Safety Responsibility Act, where a person's license will be suspended if they cannot prove financial responsibility following an accident.

Most citizens show financial responsibility by carrying auto insurance. The Iowa Division of Insurance supervises all insurance businesses licensed to sell products in the state to protect consumers and prevent predatory tactics.

If you are shopping for auto insurance in Iowa, it is important to familiarize yourself with the state laws, coverage options available, and the top-rated companies in the state.

Continue reading this guide to insurance in Iowa, and learn everything that you need to know. Feel free to compare rates using our FREE search tool above!

What are the financial responsibility laws in Iowa?

Most states require individuals to carry auto insurance for their financial protection and for the protection of people on the roadways. In Iowa, individuals must simply prove that they are financially responsible drivers following an accident where they is bodily injury, death or damage sustained that totals more than $1,500.

A majority of people who prove financial responsibility will do so by purchasing and maintaining liability auto insurance coverage, but this is not the only way to avoid license suspension.

Drivers also have the option to Post a deposit of $55,000 to the Office of Driver Services, get releases from injured parties, arrange a payment agreement, or get a judgement showing that they are not liable for damages in civil court to prevent suspension.

Unfortunately, choosing not to carry insurance can cost you a pretty penny out-of-pocket and a lot of your valuable time settling in court. Rather than taking the risk of having to pay for accident damages with your own hard earned money, it is in your best interest to carry at least a basic auto insurance plan in Iowa.

The Consequences of Failing to Comply with the Law

Everyone has the right to feel safe behind the wheel. If someone causes damages or injuries while they are operating a motor vehicle, they must be able to help the injured party recover.

If anyone fails to prove they can pay for the damages they have been deemed negligent for, your license may be suspended or revoked and you will have to prove financial responsibility for future accidents before your license can be reinstated. Methods of proof can be in the form of a surety bond of $55,000 deposit, or an SR22 filed by your auto insurance company.

What types of coverage are available in Iowa?

It is important to know what types of coverage exist when you are shopping for auto insurance in Iowa. Iowa operates under a tort system, where the at-fault party's insurance will pay for the injuries and the damages sustained in the accident.

Because of this, Liability and Uninsured Motorist are both equally important types of coverage. Here is a breakdown of each coverage option that you can purchase:

Liability Coverage

Liability is broken down into two separate forms of cover: Bodily Injury (BI) and Property Damage (PD). When you purchase a standard auto plan, it will always include both BI and PD coverage that will cover the name insured, drivers listed on the policy and permissive users driving the vehicle on the policy.

Bodily Injury will pay for medical bills caused to the injured party up to the limits stated on the policy. Property Damage will pay for damages to other vehicles, up to the limit on the policy. If you carry insurance, you must have at least $20,000 per person, $40,000 per accident in Bodily Injury and $15,000 per accident in Property Damage.

This coverage does not pay the insured, passengers of the insured, or family members.

Medical Payments

Insurance may be required to protect other parties when you are negligent behind the wheel, but you should take time to ensure that you are protected as well. Medical Payments (MP), is a coverage option that protects you and your passengers regardless of who is found at fault for an accident.

If you or your passengers sustain injuries, this coverage will pay for medical treatment so that you can see a doctor right away even when you do not have medical insurance. All limits stated are per person. This is an optional coverage that can be rejected if you have no need for duplicate coverage.

Uninsured/Underinsured Motorist

It is extremely important to carry Uninsured Motorist coverage in the state of Iowa because of its unique auto insurance laws. In a state where insurance is not a legal requirement, you need to get peace of mind in knowing that your damages and medical bills will be paid for if you are involved in an accident with someone who chooses to self insure and later realizes they cannot afford to pay for these bills.

Uninsured and underinsured motorist will pay for your medical bills if someone without liability insurance, or someone who does not have enough coverage, hits you. You may also be able to add a rider to pay for your car's damage or for your deductible if you carry collision.

Comprehensive

You are contractually obligated to buy comprehensive and collision coverage to pay for your vehicle's damages when a covered loss happens.

Comprehensive coverage will pay for losses caused by fire, theft, vandalism, hail, glass breakage and collisions with a live animal. You will only be responsible to pay for your deductible.

Collision

If you are involved in an at-fault accident, the other party's insurance will not pay to repair your vehicle.

To protect you from having to foot the bill to repair your car after an accident, you will need collision cover. This will provide coverage for all of your repairs, up to the fair market value of your car, minus your deductible.

Rental Reimbursement

If you are in an at-fault accident and your vehicle is out of commission, purchasing rental car coverage can help you cover the cost of a replacement vehicle while your vehicle is being repaired. You can select a dollar limit per day, and the insurer will pay this amount for a specified number of days.

How to Find the Best Insurance Company in Iowa

Now that you know how important it is to carry auto insurance in Iowa and you have learned about the coverage options that are available, the next step is to find a reputable insurer that offers good rates and excellent service. Insurance companies must have their rates approved by the Iowa Division of Insurance, but they have unique rates from company to company.

The key to being a wise consumer is to find the company who is targeting drivers in your age group or risk classification and is financially stable. Here are some tips to rank companies on your own:

Make a List of Financially Stable Companies

The best company is a financially stable one. When you are distinguishing between quality companies and less reputable ones, you should focus on finding a company that is credit worthy and has financial security. The best way to do this is to locate a list of companies licensed to do business in Iowa and then check each company's financial rating through a consumer rating bureau like A.M. Best.

Enter the company's name in the database, review the letter grade of the company, and cross companies with a poor grade off of your list.

Check Customer Service and Claims Processing Reviews

When you buy insurance, you never really want to use the coverage. You are essentially paying for customer service until you need to file a claim. Be sure that you check for official complaints through the division of insurance to see if there is a pattern of customer service complaints or claims processing complaints.

In addition to checking the licensing status and complaint status of the insurer, you should check for complaints on third-party sites to see if a company is known for poor service, claims delays, or unfair claims processing. Do not let one single complaint steer you away from a company because all companies have complaints filed against them.

Shop Around For Insurance

You should not buy insurance from the first company that you request a quote from. If you want the best rates, the best thing to do is to comparison shop through several different companies. If you are limited in time, you do not have to contact every insurer just to compare rates.

You can use our FREE advanced rate comparison tool below to compare the rates through all of the top insurers in the state by entering your information one single time. Once you have the rates, select the best rate from the most reputable of the insurers so that you can feel great about your purchase.