Like most states, car insurance in Iowa is governed by a financial responsibility law that requires state residents to prove that they can be financially responsible should they be found at fault for an accident involving one or more other drivers. In Iowa the easiest way to meet the state’s financial responsibility is to purchase an auto insurance policy that meets or surpasses the minimum levels of liability coverage required by state law. As of 2012 coverage minimums in Iowa were set at $20,000 in bodily injury coverage for a single person and $40,000 in bodily injury coverage for two or more people. The bodily injury coverage required by Iowa will cover the cost of any injuries sustained in an accident that was caused by the policy holder except those sustained by the policy holder or the passengers in the policy holder’s vehicle. Drivers in Iowa are also required to have at least $15,000 in property damage coverage which will help pay for any damaged property in an accident caused by the policy holder except for damage to the policy holder’s vehicle. If an Iowa driver is in an accident that they caused the cost for any injuries or property damage will first be deducted from the drivers insurance and any outstanding balance will be billed to the driver.
In Iowa, after a driver is involved in an accident they are then required to prove they will be financially responsible for all injuries or damages that occurred. Iowa drivers that have a car insurance policy that meets state minimum standards can use that as their proof of financial responsibility. Drivers without an auto insurance policy must provide proof in any number of different ways. Aside from a car insurance policy the easiest way for a driver in Iowa to prove financial responsibility is by having the money on hand to pay for any damages and making payment for the cost of the accident to the Office of Driver Services. An Iowa driver can also attempt to legally satisfy financial responsibility by obtaining a written waiver from all other drives involved relieving the at-fault driver of any financial liability for the accident. In some instances an Iowa driver may even be able to have the court relieve them of financial responsibility by challenging their status as the at-fault driver in an accident. Although maintaining car insurance in Iowa is not compulsory, once a driver is in an accident that is determined to be their fault they are required to provide immediate proof of financial responsibility. If a driver cannot provide one of the forms of proof that was mentioned above they will have their license and registration suspended. In order to have the suspension lifted a driver will have to show proof of financial responsibility in order to have the suspension lifted.
In addition to liability insurance Iowa residents also have the option to voluntarily purchase a variety of other types of car insurance. Uninsured and underinsured motorist insurance for example is a common addition to many car insurance policies purchased in Iowa. Both uninsured and underinsured motorist coverage will protect a driver from having to bear the financial responsibility should they be involved in an accident with an uninsured driver that is at-fault. In the case of uninsured motorist coverage the insurance will pay for any damage or injuries sustained by the policy holder or passengers in the policy holder’s vehicle in an accident involving an uninsured driver. In most cases the insurance company will pay the policy holder while also taking the uninsured driver to court in order to recoup the money that they paid out. Since an at-fault driver is financially liable for all injuries and damage sustained in an accident whether they have insurance or not it is not uncommon for both drivers and insurance company representatives to be involved in lawsuits focusing on financial reimbursement for an accident. In Iowa, underinsured motorist coverage functions in much the same way except the amount that the policy holder’s insurance company pays out can be calculated by subtracting what the at fault driver’s insurance company is willing to pay from the total cost of the accident. Like uninsured motorist coverage, underinsured motorist coverage will often result in the car insurance company attempting to be reimbursed by the at-fault driver or their insurance company. In addition to uninsured and underinsured motorist coverage most Iowa drivers are also eligible to purchase comprehensive or collision coverage for their vehicle. In some cases these types of coverage may even be required if an Iowa resident purchases a new vehicle. Both comprehensive and collision coverage fill the gap in coverage left by liability insurance, which will only reimburse other drivers and not the actual policy holder for injuries and damage that are sustained in an accident.