Auto Insurance Requirements in Iowa

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 $20K/$40K/$15K.

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. Law enforcement may suspend your license or fine you if you fail to provide valid proof when asked for it.

Contents

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 liability insurance. In the event you cause an accident, liability insurance covers expenses such as the other driver's medical bills and bumper replacements. This insurance needs to have at least the following coverage amounts (limits) in order to fulfill the minimum requirements in the Hawkeye State:

Bodily injury (BI): $20,000/person and $40,000/accident

Requirements

Covers

Does not cover

Property damage (PD): $15,000/accident

Requirement

Covers

Cheapest companies in Iowa for minimum liability

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 additional and unexpected costs. For example, you may find yourself in a hit-and-run situation, without driver and insurance information to file a claim. 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 the event that the driver is either uninsured or unidentifiable (hit-and-run), having UMBI coverage means you can make claims with your own insurer instead. Every insurer licensed in the state must include UMBI in the amounts of 20/40 per accident in every new policy quote. However, since it is not required, you can reject it in writing, but most government officials recommend you 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 versus your 50/100). Your insurer will cover the balance, up to the difference between the two limits. This coverage is also automatically included in 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 Iowa Department of Transportation (DOT) as proof of your financial responsibility:

Bond insurance card: The director of Iowa's DOT will issue an insurance card if you file either a valid surety bond or a real estate bond with a value of $55,000 toward future accidents where you are negligent. The bond is a promise that if you cannot pay for the judgments against you for bodily injuries or property damage you cause, another party will serve as backup. A surety bond means a surety company will pay in your place. With a real estate bond, two other individuals will need to put up their Iowa real estate as collateral in case you fail to satisfy the judgments, and their property will be used to 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 providing proof that you do not have any unpaid claims from any previous accidents.