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In the state of Iowa, all drivers must have the minimum liability insurance coverages before they can drive on public roads. Even though the state does not necessarily require drivers to have car insurance, the Motor Vehicle Financial and Safety Responsibility Act mandates that every driver involved in an accident must show financial responsibility for any harm caused.

The penalties for driving without sufficient car insurance include fines and serving jail time. The driver may also need to pay for the medical expenses and property damage to the affected driver. The state uses a traditional fault-based system.

What coverages are required by the state?

The state requires you to have a minimum of $20, 000/40, 000 underinsured/uninsured motorists' coverage, $20, 000 bodily injury per person in every accident, and $40, 000 bodily injury for all persons in every accident.

The state encourages but does not require drivers to carry additional forms of insurance such as comprehensive coverage and collision coverage. Most drivers invest in additional insurance to get better protection.

Auto insurance premiums

Insurance companies that offer auto insurance in Iowa are under the regulation of the Iowa Insurance Division. Premium payments vary depending on factors such as your age, gender, the type and age of your car, your driving history, specific location, and the use of your car.

What happens if a driver doesn't carry auto insurance?

Iowa has some of the strictest auto insurance laws. The laws are governed by the Financial and Safety Responsibility Act. If a driver does not have proof that they have at least the minimum coverage, their vehicle registration and driver's license may be suspended.

In case of an accident, drivers without insurance have to foot all the expenses that may arise. It is the responsibility of such drivers to get releases from the people who were affected in the accident and come up with a payment plan. Once all the payments have been made, they are required to provide the state with proof that they have completed the payment.

The person who suffers an injury or damage after an accident should proceed as follows to get compensation;

  • Filing a claim to their insurance company. They may get compensation if the loss they suffered is insured under their specific policy. The insurance company will help them pursue the at-fault driver for compensation
  • They can file a third-party claim to the at-fault driver's insurance provider
  • They may file a personal injury lawsuit in a civil law court

The new driving laws

Iowa has new driving laws. Driving and auto insurance needs are always changing to address new issues. The following are some of the recent laws that the state has enacted.

  • The use of cell phones, whether hand-held or hands-free, is prohibited for novice drivers in the state. According to the state, novice drivers are all drivers with an intermediate or restricted license.
  • All young drivers are expected to carry and instructional license for a year before applying for an intermediate license.
  • Young drivers must have one unrelated minor passenger to ride with them as a supervisor for the first six months after getting an intermediate license.

Complying with the Motor Vehicle Financial and Safety Responsibility Act

Purchasing insurance is not the only way to comply with the Motor Vehicle Financial and Safety Responsibility Act. The Iowa Department of Transportation provides you with other options including the following;

  • Making a bond to Driver & Identification Services
  • Providing evidence of having settled all damages
  • Being found not liable after a civil suit
  • Issuing a warrant for confession of judgment with the promise that you will pay for all damages in an installment plan
  • Filing an agreement to pay for all damages to the other person's property in a payment plan

Even though Iowa doesn't force drivers to carry auto insurance, it is the most attractive alternative. It is almost impossible for drivers to ascertain that they will be able to pay all liability costs in the event of an accident.