Iowa Auto Insurance

Iowa requires both Bodily Injury Liability and Property Damage Liability. It requires the following amounts for both types of coverage:

• At least $20,000 for one person injured in an at-fault accident
• At least $40,000 for all people injured in an at-fault accident
• At least $15,000 for all property damage in an at-fault accident

Bodily Injury Liability

Bodily Injury Liability (BIL) covers injures sustained by the other party in an accident for which you were at fault. It reimburses the other party for their medical expenses, lost wages, child-care expenses, and even funeral costs. In severe accidents, the total cost can soar well above $20,000, so it is a good idea to purchase perhaps twice or even three times more than the minimum. In fact, most Iowa residents purchase $100,000 of BIL for one person’s injuries and $300,000 for total injuries. Purchasing these larger amounts is better than risking the same payments out of pocket, which could easily land you in debt.

Property Damage Liability

Iowans also purchase at least twice as much Property Damage Liability (PDL) than the state-required minimum of $15,000. PDL reimburses repairs made to the other party’s car following an accident. It also applies to the surrounding property in the accident’s vicinity, such as telephone poles, traffic signs, and buildings. This coverage reimburses the costs for repairing these structures, whether public or private property.

Other Recommended Types of Insurance

The above insurance relates solely to the other party that is not at fault for an accident. There are other types of coverage that strictly protect you and those listed on your policy. This coverage also protects those to whom you give permission to drive your car.

To protect yourself and your dependents from bodily injury, you should purchase Personal Injury Protection (PIP). This coverage acts as BIL for you and your loved ones, as it reimburses medical costs, child-care expenses, and even funeral costs resulting from an accident. It applies to either an at-fault or not-at-fault accident, as long as it is the type of accident covered by the terms of your policy.

Likewise, Collision Coverage and Comprehensive Coverage protect your car and other personal property from damage. Collision Coverage takes care of the repairs to your car when you are in a collision with another car. Comprehensive Coverage finances those same repairs to your car when it has been damaged by forces of nature or been vandalized.

You should also give serious thought to purchase Uninsured/Underinsured Motorist Coverage. This coverage protects you from directly paying for injuries and damages done to you and your car due to an uninsured motorist. Unfortunately, uninsured motorists are a dime a dozen on the road and this insurance will prevent you from paying extremely high costs if you are involved in an accident with such a motorist.

Iowa’s Financial Responsibility Laws

Unlike other states, Iowa does not have a compulsory insurance law per se, but demands proof of financial security. Its Financial and Safety Responsibility Acts invokes heavy penalties for those found lacking state-mandated insurance.

How You Provide Proof of Financial Responsibility

Iowa residents must prove that they have liability insurance if they cause at least $1,000 worth of damage to another car in an accident. You can use your insurance ID car as proof of financial responsibility. Otherwise, the Iowa Office of Driver Services will contact your insurance company, who will then file a Certificate of Automobile Liability Insurance.

If you lack an insurance ID card, you can satisfy Iowa’s financial responsibility law in the following ways:

• You can send a sureties bond, cash, cashier’s check, certified check, band draft, or postal money to the Office of Driver Services
• You can obtain releases from all damaged persons in the accident
• You can get a civil damage action release that relieves you of all liability
• You can sign an agreement to reimburse the damaged persons/property on an installment plan
• You can execute a warrant for confession of judgment that includes an agreement upon payment timeframe
• You can file evidence of a total settlement of all injuries and damages

If you gave permission to another person to drive your car, and that car was involved in an accident, you must show proof of financial responsibility. This proof also applies to the person you permitted to drive your car.

When Proof of Financial Responsibility Does Not Apply

You do not need to provide proof of financial responsibility in the following cases:

• Your car was legally stopped, standing, or parked
• Your car was driven without your permission
• You were the only person damaged in an accident, and there was no property damage

What about Non-Residents?
If you are a non-resident of Iowa, you must abide by Iowa’s financial responsibility laws. That means you cannot operate or register any Iowa vehicle until you have satisfied all requirements for financial responsibility.

Iowa’s Penalties for Violating Proof of Financial Responsibility

If you fail to show financial responsibility, you could face loss of your vehicle’s registration and suspension of your license. To reinstate your license, you would have to provide proof of financial responsibility by obtaining $55,000 worth of liability coverage. You may also send $55,000 to the Office of Driver Services by posting securities, such as cashier’s check, certified check, cash, or surety bond. This filing must be maintained for two years.

Clearly, the best way to avert these penalties is to keep an up-to-date auto insurance card on your person at all times.

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