As stated in the Motor Vehicle Financial Responsibility chapter of the Iowa Code, all vehicle owners and operators in Iowa must have auto insurance. This legislation aims to ensure that drivers fulfill their financial responsibilities in the event of an accident, thereby protecting themselves and other individuals on the road.
The law establishes specific minimum coverage requirements for bodily injury and property damage, which are crucial financial safeguards in unfortunate situations.
The Iowa Insurance Division (IID) is vital in regulating the state's insurance industry. Its responsibilities include enforcing insurance companies' compliance with state laws, maintaining financial stability, and providing fair treatment to customers.
Working with the IID, the Iowa Motor Vehicle Division (MVD) under the Department of Transportation (DOT) enforces auto insurance requirements and verifies drivers comply with the mandated coverage rules.
What are the Auto Insurance Requirements in Iowa?
Iowa drivers must understand the auto insurance requirements to comply with state laws. Meeting these requirements also helps drivers be financially protected in case of accidents.
Minimum Liability Insurance Coverage
As per Section 321A.21 of the Iowa Code, all drivers in Iowa must meet the minimum liability coverage required. This coverage helps drivers pay for any injuries or damage to property they caused to others involved in an accident.
These minimum requirements are the following:
- $20,000 per person/$40,000 per accident for bodily injury or death
- $15,000 per accident for property damage
The minimum coverage required is intended to cover basic expenses for the accident, which greatly helps alleviate the strain of money on all parties involved.
Other Auto Insurance Coverage Options
While liability insurance is mandatory, Iowa drivers have several additional options to enhance their coverage. These supplementary policies can provide a more comprehensive safety net for various road scenarios.
Collision
Although not required by law, collision coverage is a wise choice for many Iowa drivers. This policy covers the repair or replacement costs for a vehicle damaged in an accident, regardless of who is at fault. It is particularly valuable for those with newer or high-value vehicles, offering peace of mind during a collision.
Comprehensive
Comprehensive coverage goes beyond collision scenarios, offering protection against various non-accident-related incidents. This policy can be a financial lifesaver in theft, vandalism, fire, or natural disasters. While optional, it provides a robust shield against many of life's unpredictable events that could damage vehicles.
Uninsured/underinsured Motorists
While not mandated by Iowa law, uninsured and underinsured motorist coverage is a prudent addition to any auto insurance policy. This coverage acts as a safety net if the driver is involved in an accident with a driver who either lacks insurance or doesn't have sufficient coverage to pay for damages.
Penalties for Driving Without Insurance in Iowa
Iowa law mandates all drivers to carry liability insurance for their vehicles. Drivers must always keep proof of insurance with them and show it to law enforcement when asked. Failing to do so can result in various penalties.
The following are the primary consequences for operating a vehicle without insurance in Iowa:
Fines
Drivers in Iowa caught without the required insurance coverage must pay fines. The first offense fine is typically $250, and repeat offenders may incur higher fines of up to $2500.
Note that if the driver who got fined fails to pay the fine within 60 days, their license may get suspended. The Iowa DOT will send the driver an official notice of suspension. The suspension will only be removed when the DOT receives proof that the driver has paid the fine.
To reinstate a suspended driver's license due to failure to pay fines, the individual must visit any Iowa MVD office and pay the $20 reinstatement fee. They will also have to pay $10 for the duplicate license.
Furthermore, drivers must meet any other requirement mandated by the DOT or the court. They can use the Iowa DOT's View Reinstatement Requirements online portal to check for their requirements.
Suspension
The state may suspend a driver's vehicle registration or license for up to 12 months if they are found operating a vehicle without insurance. This suspension prohibits the driver from operating their vehicle until they can provide proof of insurance and pay the fees.
In Iowa, drivers can appeal their suspension if it is indicated in the Official Notice (Form 431010) that the driver receives from DOT. The form will also indicate the deadline for submitting the appeal. However, if the driver receives the Request and Notice form from a law enforcement officer, they only have ten days to appeal.
To appeal, the driver must complete the Request to Appeal Loss of Driving/Registration Privileges (Form 432034). They can complete the form online through the link provided, by email to DriverServices.Appeals@iowadot.us, or by mail to:
Office of Driver Services
Iowa Department of Transportation
P.O. Box 9204
Des Moines, IA 50306-9204
Fax: 515-239-1837
SR-22 Requirement
After an insurance violation, drivers might need to file a Certificate of Automobile Liability Insurance (Form SR-22). This document, submitted by the insurance provider to the Iowa DOT, verifies that the driver has the necessary auto insurance coverage. The SR-22 requirement typically lasts three years and often leads to increased insurance premiums.
How To Choose the Right Auto Insurance in Iowa?
Iowa drivers must carefully consider various factors when selecting auto insurance to meet both legal requirements and personal needs.
Check Lender Requirements
For those with vehicle loans, lenders typically mandate comprehensive insurance coverage, including collision and comprehensive policies. Owners of newer vehicles might also benefit from gap insurance, which covers any discrepancy between the insurance payout and the outstanding loan balance in case of a total loss.
Evaluate Your Own Risk Factors
Individual circumstances, particularly one's driving history, significantly influence insurance costs. Drivers with a record of traffic infractions or accidents may face higher premiums. It is crucial to consider these factors when determining coverage levels and comparing quotes from different insurers.
Choose Coverage Options
Iowa offers drivers a range of auto insurance options. Liability coverage is mandatory, including protection for bodily injury and property damage. Acquiring only the minimum auto insurance coverage averages around $324 a year in Iowa, while full coverage averages at $1775.
However, getting only liability coverage may not be enough. Drivers can also opt for additional coverages. Check this guide's "Other Auto Insurance Coverage Options" section for details on these coverage types.
Check Company Reputation and Financial Stability
Choosing an insurance provider with a strong reputation and solid financial footing is essential. Iowa drivers can evaluate these aspects by:
- Researching the company's industry presence and efficiency in handling claims
- Examining financial strength ratings from respected agencies
- Reading online reviews and consumer reports for real customer experiences
- Seeking recommendations from friends and family about their insurance experiences
Considering these factors, Iowa drivers can make more informed decisions about their auto insurance coverage. Doing so helps them acquire appropriate protection that aligns with their needs and circumstances.
How To Find an Iowa Licensed Insurance Company?
Iowa residents seeking a licensed insurance provider have access to several trustworthy resources. The IID maintains a list of licensed insurance companies that drivers can check. If drivers are interested in contacting insurance agents, the IID also has a dedicated list of registered agents.
Aside from the lists provided by the IID, drivers can access the Lookup Search tool provided by the National Association of Insurance Commissioners (NAIC). The NAIC search tool provides additional functionality, particularly for users who require more detailed and company-specific information.
Users can access more comprehensive reports about individual insurers by clicking on the "Click for Report Options" link associated with each company result. This feature enables users to delve deeper into the specifics of each company they are interested in.
What Factors Affect Auto Insurance Rates in Iowa?
Regarding auto insurance in Iowa, several factors come into play when determining premiums. Understanding these elements can help drivers make informed decisions about their coverage.
Demographics
Insurance providers take into account various demographic factors when calculating rates. These include:
- Age: Younger drivers, particularly teenagers, often face higher premiums due to their limited experience and risk profile.
- Gender: Male drivers may encounter higher rates attributed to statistically riskier driving behaviors.
- Marital status: Married individuals frequently benefit from lower rates, as they're generally perceived as more responsible drivers.
For example, 18-year-old males pay an average of $4478 on auto insurance compared to females who pay $3,931 annually. People aged 20-25 also pay higher premiums than those in their 30s and those of the same age but still under their parent's insurance policies.
Driving History
An individual's driving history plays a significant role in determining their insurance costs. Clean records typically result in lower premiums, while accidents or traffic violations can increase rates due to higher perceived risk.
Type of Vehicle
The type of car an individual drives can substantially impact their insurance rates. High-performance, luxury, and newer models often cost more to insure. Vehicles with advanced safety features may qualify for reduced premiums.
The market value of the vehicle is also a consideration. Cars with lower value can get lower rates.
Location
The primary location of the vehicle also affects insurance rates. Different counties and cities can have different insurance rates in Iowa. It usually depends on population density, crime rates, and other factors.
For example, the monthly average rate for full coverage is $149 in Des Moines, $146 in Davenport, and $140 in Burlington. Des Moines has a population of over 200,000, Davenport has over 100,000, and Burlington has over 23,000.
More people can sometimes lead to higher risks of road accidents, so many densely populated cities tend to have higher auto insurance rates.
Type of Coverage
Another factor that impacts the insurance rates in Iowa is the extent and type of coverage a driver chooses. Higher coverage limits and additional options increase premiums, while minimum coverage can lower costs. However, sometimes, minimum coverage may not provide sufficient protection for the driver's needs.
Credit Score
In Iowa, credit scores can influence auto insurance rates. Higher credit scores typically result in lower rates, while lower credit scores may lead to higher premiums.
Insurers often use credit-based insurance scores to determine the drivers' rates. Fair Isaac Corporation (FICO) score is the most used credit score metric in the U.S. This scoring weighs five different categories:
- Payment history – 35%
- Amounts owned and available credit – 30%
- Length of credit history – 15%
- Diversity of credits used – 10%
- New credit – 10%
Based on the categories above, the driver gets scored from 300 to 850, with specific descriptions for each range. The higher the score, the better chance of getting good rates.
- Under 580: Poor and demonstrates risks in borrowing
- 580-669: Below average but may still get approved
- 670-739: Slightly below average but still a good score
- 740-799: Above average and demonstrates dependable borrowing
- 800+: Demonstrates an excellent borrowing behavior
For more information, check the "Consumer Connection: What is a Credit Score" page on the official IID website.
Iowa Automobile Insurance Plan (IAAIP)
Per Iowa Code Section 515D.11, drivers denied coverage by standard insurers may avail of the Iowa Automobile Insurance Plan (IAAIP). This plan is a safety net for high-risk drivers who can't secure insurance through the regular market.
For further details about the IAAIP, drivers can contact the Automobile Insurance Plan Service Office (AIPSO) Iowa hotline at 800-706-6100. Alternatively, they can send a fax to 800-827-6260 or email iaaip@aipso.com.
How To Save Money on Auto Insurance in Iowa?
Insurance premiums can be costly, but Iowa drivers have several ways to reduce them. Here are some strategies to help drivers save money on auto insurance:
Take Advantage of Discounts
Many insurers offer various discounts. For example, drivers who bundle their auto insurance coverage with other policies from the same insurer can save money. By consolidating insurance needs with one company, customers can benefit from significant savings on both policies.
Another example is when drivers insure two or more vehicles with the same insurer. Many insurance companies provide discounts for multi-vehicle transactions. It means lower rates per vehicle by covering multiple cars under one policy.
Many insurers in Iowa also provide discounts to young drivers (16-24) with a high GPA or are on the honor roll. This discount rewards responsible behavior and academic achievement.
Conduct Reviews and Adjust Deductibles
Drivers should review their insurance policies annually. This review allows for reassessment of coverage needs and adjustments based on life changes, potentially leading to cost savings.
For example, increasing deductibles for collision and comprehensive coverage can lower premiums. Dropping collision and comprehensive coverage might lead to significant savings for older vehicles worth less than ten times the premium.
Improve Credit Score
Insurance companies often factor in credit scores when calculating premiums. Improving an individual's credit rating can result in more favorable rates, indicating responsible financial management.
To improve a credit score, it is essential to pay bills on time, reduce outstanding debt, avoid opening too many new credit accounts, and regularly check the credit report for errors.
Compare Quotes
To secure the best insurance terms, periodically compare offerings from various providers. Depending on their risk assessment models, insurers may offer varying rates for similar coverage. Obtaining multiple quotes helps identify the most competitive pricing for the individual's risk profile.
Keep a Clean Driving Record
Avoiding accidents and traffic violations is one of the most effective ways to reduce insurance costs. Many insurers offer safe driver discounts for those with clean driving records. Conversely, tickets and at-fault accidents can significantly increase premiums for several years.
What To Do After an Auto Accident in Iowa?
After experiencing an auto accident in Iowa, drivers must prioritize safety and follow steps for a smooth process. These steps include:
- Assess all parties involved for injuries.
- Cal 911 for emergency services if anyone requires immediate medical attention.
- Move the vehicles to the roadside if it is safe to do so. It can help prevent further accidents.
- Turn on hazard lights to alert other motorists.
- Exchanging vital information with the other parties involved, such as:
- Full names
- Contact details
- Insurance provider names and policy numbers
- Driver's license information
- Vehicle registration details (including license plate numbers)
- Make, model, and color of all vehicles involved
- Capture images of all vehicles, visible damage, road conditions, and relevant traffic signs or signals.
- Obtain contact information from any witnesses at the scene, as their accounts may provide valuable supporting evidence.
For those unsure how to document the accident effectively, the WreckCheck App (available for iPhone and Android) or a printable checklist version can be helpful resources.
In Iowa, drivers must file an Iowa Accident Report (Form 433002) if the accident results in property damage exceeding $1500 or causes injury or death to any person, regardless of fault. This report must be submitted within 72 hours of the incident. After completing the form, drivers should mail pages 3 and 4 to the following address:
Iowa Department of Transportation
Systems & Administration Bureau
P.O. Box 9204
Des Moines, Iowa 50306-9204
If investigating officers file reports, drivers should try to obtain a copy as additional evidence for their insurance claims. By submitting a written request with the completed Request for Copy of Investigating Officer's Report of an Accident (Form 431007), drivers can obtain a copy for a fee of $4.
Inform the Insurer and File Insurance Claims
To ensure a smooth claims process, promptly notify the insurance providers after an accident. It involves sharing all relevant information with the insurer, including the following:
- The exact date, time, and location of the incident
- A detailed description of how it occurred
- Contact and insurance details of all drivers involved
- If applicable, the police report number
After receiving this information, the insurer assigns a claims adjuster for the case. The adjuster will assess the extent of the damage and determine the necessary coverage. The adjuster may request to personally inspect the vehicle or ask the driver to take it to a designated repair shop for evaluation.
Drivers can also obtain repair estimates from approved repair shops, which the adjuster will review. Assuming everything is in order, the adjuster will process the claim.
Once the claim is processed, the insurer will present a settlement offer based on the claimant's policy coverage. This offer may encompass various expenses, such as repairs, medical bills, and other accident-related costs.
Claimants must communicate regularly with their insurance provider and the repair facility throughout this process. This ongoing contact helps claimants stay informed about the progress of their claim and the status of any vehicle repairs being undertaken.
If there are disagreements about the claim settlement, Iowa residents can file an insurance complaint with the IID. The process involves determining eligibility, preparing supporting documents, and submitting the complaint online or via mail. The Division will then investigate by contacting the insurance company and reviewing their response, typically within 30-45 days.