Featured Expert
Chance McElhaney
Chance McElhaney Iowa Insurance Division View bio

This guide was written by

MoneyGeek Staff

Among its many claims to fame, Iowa was home to a pioneer of the auto industry. In the early 1900s, Iowa businessman Frederick Maytag started the Maytag-Mason Motor Co. His cars never took off, but he had better luck with washing machines. Today, Iowa is more known for corn and caucuses than cars, but it’s still a great place to drive. Read on to learn more about insurance requirements in the Hawkeye State.

Iowa Vehicle Insurance Requirements

Summary

Iowa roads are relatively safe compared with other parts of the country, and there’s a better-than-average chance that the driver in front of you has proper insurance. In fact, more than 90 percent of the state’s drivers are insured, partly because it doesn’t cost much to get protected. “Iowa continues to rank in the top three states nationally for lowest auto insurance premiums,” says Chance McElhaney of the Iowa Insurance Division.

Who Needs Vehicle Insurance in Iowa?

The Iowa Code states that all cars on the road must be registered and insured. The law doesn’t apply to cars that stay on private property, so the old beat-up jalopy in the barn is fine without plates.

Proof of Insurance

Iowans are trusting people, but officials won’t just take your word that you have insurance. While driving, you’ll have to carry a paper version of your insurance card or an electronic version on a smart phone. This proof must include the following information:

  • The driver’s name
  • The vehicle identification number
  • Dates for which the policy applies
  • Contact information for the insurer

You must show proof of insurance if you are in an accident or if an officer asks for it.

Minimum Liability Insurance Requirements

Iowa, like most states, requires drivers to carry insurance to protect other drivers and their passengers. The minimum liability requirements for auto insurance are:

  • $20,000 to cover another person injured in a collision
  • $40,000 to cover injuries to multiple people in a collision
  • $15,000 to cover property damage in a collision

Low-Cost Insurance Program

According to McElhaney, the state doesn’t have any programs for low-income residents, although he points out that cheaper options “may be offered by insurance companies on an individual basis.” In other words, it’s a good idea to check with potential insurers about low-cost insurance deals.

Alternatives to Insurance in Iowa

If you don’t want to buy regular insurance, you’ll have to find another way to prove that you can pay up to $55,000 to cover any injuries and property damage from a crash. You can do this by buying a bond or making a security deposit. If you own a fleet of cars, you can apply for self insurance.

Drivers with any of the alternative forms of insurance should know that they don’t offer great protection. On the contrary, at-fault drivers will still find themselves paying out in the case of a collision. If you have a bond with a lien against your property, you run the risk of losing that property to pay off another driver’s medical bills.

What Happens If You Don’t Have Car Insurance?

Drivers who don’t have proof of car insurance and get pulled over had better hope the officer is in a good mood. That’s because a law enforcement officer has flexibility in determining the punishment. She or he can:

  • Give a warning
  • Write a ticket
  • Write a ticket and physically take the license plates off the car
  • Write a ticket, remove the plates and impound the vehicle
  • If you actually had a policy but got ticketed for driving without proof, here’s what you need to do. You can avoid a fine by showing a court clerk proof of insurance. If necessary, you may have to pay to get new licenses, renew your registration, and retrieve your car from the impound lot.

If you didn’t have a policy in place when you got pulled over, you’ll have to pay a fine, and you’ll have to get auto insurance.

How Much Vehicle Insurance Do You Need?

Although Iowa only requires basic liability coverage, drivers can benefit by getting a plan with more coverage. Here are three things they should consider:

What Percentage of Drivers in
Iowa Lack Vehicle Insurance?
9.7% National Average: 12.6%

First, a three-day hospital stay costs $30,000 on average, according to statistics from the federal government. One can see how a catastrophic accident — including hospitalization, rehabilitation and medication — could quickly add up. That’s why industry experts recommend erring on the safe side and purchasing a policy with $100,000/$300,000 limits for bodily injury.

Second, Iowa is prone to flooding – small wonder since it’s a relatively flat state sitting between the Missouri and Mississippi Rivers. You may want comprehensive coverage to protect your cars in case your neighborhood is prone to flooding. Collision coverage will also help in the case of damage caused by other vehicles, including those driven by uninsured drivers.

Insurers automatically sign consumers up for policies to protect them from uninsured/underinsured drivers, but you can opt out with a signed statement. It’s probably smarter, though, to keep it. Nearly one out of 10 drivers on Iowa’s roadways lack insurance, and many of those who do have insurance only purchase the minimum, which means they likely wouldn’t be able to cover the full costs of a serious crash.

For more on the topic, see our MoneyGeek guide to car insurance.

Car Insurance and Special Groups

Teen Drivers in Iowa

Iowa teenagers can get their learner’s permit as early as the age of 14, which advocacy groups like the Insurance Institute of Highway Safety say is too young, even with a licensed driver in the car. They have encouraged the legislature to pass stronger graduated driver licensing rules, which they say could cut teen traffic fatalities by more than 50 percent.

With very young teenagers on the road, family premiums go up. And since the intermediate licensing of teenagers does not have strict regulations, parents will have to take their young drivers’ safety into their own hands. Among other things, they can ensure their children take a defensive driving class and drive the safest car in the household (sports cars and SUVs, which are considered risky, will drive up your premium). Such measures have the added benefit of reducing premiums.

Iowa Car Insurance Premiums: The Difference a Teen Makes

Median annual price change for families with a teen driver on their policy:

$1,552 increase This is a difference of 122%.
Comparison of Premium Ranges
25th - 75th Percentile Median
Watch Your Speedometer

Average annual premium increase if your teen gets a speeding ticket while driving 11-15 mph over the speed limit:

Male teen

$470

Speedometer
Female teen

$392

Insurance Discounts for Iowa Teens

Impact on annual premium with Good Student and Defensive Driving discounts:

$250 saved

Compare Premiums from Iowa Insurance Providers

Policy cost vary more than you may think, so shop around. Check out the annual average premiums for a married couple with a 16-year-old teen driver in Iowa:

Insurance Provider Min MEDIAN MAX
State Farm $1,622 $2,942 $5,507
Farm Bureau Mutual (IA Group) $1,664 $3,003 $6,735
American Family $2,110 $3,313 $5,842
IMT Insurance Company $1,724 $3,306 $7,712
Progressive $1,810 $3,328 $9,730

Car Choices for Teens: Impact on Iowa Premiums

Do insurers consider sports cars a more risky choice for teens than sedans and minivans? Definitely, according to industry insiders -- and premium rates reflect it.

Average premium for two 2014
Mustang GTs

$4,167

Average premium for two 2008
Town and Country Limiteds

$2,678

Annual benefit of minivans:

$1,489 saved This is 36% less expensive.
Premium Comparison for Two Adults + 16 Year Old
25th - 75th Percentile Median

College Students in Iowa

The onset of college is a life event that an insurance company needs to know about. College students in Iowa should stay on the family policy, unless they have a car registered in their name, in which case they’ll need a separate policy. Parents can probably reduce their premium if their child doesn’t bring the car to campus.

If the car goes with them to campus, whether in Iowa or out of state, parents should make clear that other people are not to drive it. Loaning the car to friends can expose your and your student to too much risk if those friends are not properly insured.

Iowa College Students vs. Teen Drivers

Median annual premium change with a college student vs. high school driver

$802 decrease This is a decrease of 25%.
Comparison of Premium Ranges
25th - 75th Percentile Median

Annual Premiums With a College Student in Iowa

Every year, look at your policy to see whether you could get a better rate. Case in point: Here are the average premiums for a married couple with a 19-year-old college student in Iowa.

Provider Min MEDIAN MAX
American Family $1,057 $1,688 $3,079
State Farm $1,013 $1,899 $3,826
Farm Bureau Mutual (IA Group) $1,306 $2,359 $4,703
IMT Insurance Company $1,136 $2,394 $5,620
Progressive $1,530 $2,658 $6,946

Surprising Savings for Iowa College Students

You may see a small decrease in your family’s premium if your student lives 150+ miles away from home.

Average premium for a 19-year-old male
  • $2,705 at home
  • $2,137 at school
  • $568 in savings
Average premium for a 19-year-old female
  • $2,334 at home
  • $1,960 at school
  • $374 in savings

How Car Choice Can Lead to Savings in Iowa

Your college student driving a minivan rather than a sports car will drive down your premium — a reflection of the lower risk to insurers.

2014 Mustang GTs (2)

$2,934

2008 Town and Country Limited minivans (2)

$1,845

Annual benefit of minivans

$1,089 saved This is 37% less expensive.
Premium Comparison for Two Adults + College Driver
25th - 75th Percentile Median

Military Drivers in Iowa

If you’re one of the approximately 300 active-duty military personnel living in Iowa or a retired veteran in the state, you can probably qualify for discounts on auto insurance. Decide how much coverage you need, possibly greater than the state-required minimum, then shop around to compare prices.

You’ll need to show proof of insurance before the Iowa DMV will sell plates and register the vehicle. Iowa military residents must register their vehicle like any other citizen when they move to the state. Military families living temporarily in Iowa can maintain their registration in their home state, so long as it’s up-to-date.

Iowa Service Members:
The Vehicle You Choose Affects Your Premium

Rollover crashes are more common among SUVs and pickups, according to insurance researchers, but an older model SUV drives up your premium less than a recent model sports car.

Military Drivers: A Comparison of Premium Ranges by Driver Age and Vehicle
25-Year-Old Driver
50-Year-Old Driver
25th - 75th Percentile Median

Age Savings for Iowa
Service Members

Median auto insurance
for service members:

$921
Male (25 yrs)$1,136
Male (50 yrs)$860
$276 savings
Female (25 yrs)$1,030
Female (50 yrs)$869
$161 savings

Compare Average Premiums Available to Iowa Military Personnel

When looking for the best auto insurance, it pays to do some comparison shopping. Check out the average annual rates you can get in Iowa.

Premium Comparison for a Military Driver
25th - 75th Percentile Median

Seniors in Iowa

Unfortunately for senior drivers in Iowa, the state does not mandate discounts for any particular age group. That’s why it’s important to shop around for coverage. Different insurers have different policies — look for one that rewards experienced drivers for having a good driving record and/or taking a driver safety class.

Undocumented Workers in Iowa

Though most undocumented immigrants living in Iowa are not eligible for driver’s licenses, some qualify through the U.S. government’s Deferred Action for Childhood Arrivals program. Here are the basic criteria:

  • You have resided in the U.S. continuously since 2007
  • You were under 31 and without legal status by the end of that period
  • You arrived in the U.S. before turning 16
  • You have a diploma, are currently in school or served in a branch of the military
  • You have a clean record

Ridesharing Insurance: Are You Covered?

As of spring 2016, Iowa’s legislature was still working on a bill to regulate transportation network companies (TNCs), better known as ridesharing companies. Until the state regulates TNCs, Uber and Lyft drivers there are in something of a legal limbo because personal auto insurance policies typically do not extend to driving for hire. In addition, TNC insurance may not fully cover you.

If you’re a ridesharing driver:

If you’re a ridesharing driver, talk to your insurance agent to figure out:

  • Are you covered by the TNC’s policy when the app is on, even though a passenger may not yet be in the car?
  • Are your passengers protected?
  • What happens if an uninsured driver causes damages or injuries?
  • Who pays if you are at fault in an accident while driving for a TNC?
  • Does the TNC pay collision and comprehensive insurance for your vehicle?

Car Accidents: How to File a Claim

No one wants to get in an accident. But if you do get in one, here’s what you should do, both in the immediate aftermath and in the days and weeks afterward:

  • Pull over.
  • If there’s an injury, call 911.
  • Share your name, address and vehicle registration number with the other driver, showing your license if requested.
  • If law enforcement arrives, an officer will fill out a report. If not – and if there was an injury or property damage of $1,500 or more, you are responsible for filling out a report and submitting it within three days.
  • Regardless of who is at fault, contact your insurance agent as soon as possible. He or she needs to review all the evidence before repairs are made.
  • Wait for the accident investigation to conclude whether you contributed to the accident.

Best and Worst States for Drivers: How Does My State Rank?

Iowa ranks in the top 20 states for traffic safety, in terms of overall fatalities per mile driven. Drivers seem to take their duties seriously, with only 16 percent of traffic fatalities related to speeding — the third-lowest rate in the nation. McElhaney says that safe driving, along with a competitive marketplace, explain why Iowans generally get a relative bargain on car insurance.

Iowa Driver Safety Ranking

15th in the U.S.
About Our Data

The driver safety table shows the different safety factors that contribute to your state's overall safety rank (in the green box). The overall safety ranking and the National Ranking column scores in each category (including crash fatality rates) are from safest to most dangerous, with 1st being the safest and 51st the least safe.

How did we create the safety rankings?

We created a traffic safety ranking of all US states plus the District of Columbia by combining data from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety. We looked at fatality rates by distance traveled as well as by population and gave more weight to behaviors that were riskier and preventable (i.e., drunk driving, not using a seat belt), as well as to accidents that involved more than one party (i.e., multi-vehicle).

Driver Safety Profile Number of Fatalities Fatality Rate

The fatality rate is the rate per one billion vehicle miles traveled, except for pedestrian and bicyclist fatality measures, which are per measured per a population of 100,000.

Ranking
(National)

Rankings are in order of safest to least safe. A state with the lowest fatality rate would be the safest, and thus ranked #1.

Drunk Driving-Related Fatalities 101 3.21 26th
Speeding-Related Fatalities 51 1.61 4th
Passenger Vehicle Unrestrained Fatalities 102 3.22 24th
Unhelmeted Motorcycle Fatalities 31 0.98 36th
Multiple Vehicle Fatalities 157 4.96 32nd
Pedestrian Fatalities 20 0.65 5th
Bicyclist Fatalities 3 0.10 13th
Total Vehicle Fatalities 317 10.02 21st

Sources: National Highway Traffic Safety Administration, Insurance Institute for Highway Safety

Iowa: Protecting You from Injury on the Road

Iowa may have fairly safe drivers, but Advocates for Highway and Auto Safety says its road safety laws — especially its seat belt rules — need improvement. Here’s a look at the record.

Safe Driving Laws – Iowa

  Requirement State Law Details
Mandatory seat belts Partial Drivers and passengers in the front seat must wear seat belts; drivers can be pulled over for this infraction
Child passenger safety Children under age 1 must sit in a rear-facing child seat; from 1 to 5, they must use child restraints
Driving under the influence (DUI) The blood alcohol content can be no higher than .02 for minors; it is .08 for all others
Ignition interlock after DUI Not mandatory
Talking on cell or texting while driving Novice drivers cannot talk on the phone; no drivers can text in the car, but they cannot be pulled over for this infraction alone
Protections for young drivers For the first six months, novice drivers can only have one other minor in the car, unless their parents waive this requirement; for the first year, they cannot drive unsupervised from 12:30-5 a.m..
Motorcycle helmet law No statewide law
Bicycle helmet law No statewide law

Source: Governors Highway Safety Association and National Highway Traffic Safety Administration

Car Insurance Resources for Iowa Residents

Iowa Auto Insurance Shopper’s Guide

Have questions about what you need or what you should be paying? The Shopper’s Guide covers a lot of material for both new drivers and drivers with new needs. Its FAQ section is particularly helpful.

Iowa Automobile Insurance Plan

People who want to drive but have been rejected multiple times by insurers have a last resort: the Iowa Automobile Insurance Plan, which covers at-risk drivers.

Iowa Department of Transportation: Accident Reports

If drivers were involved in a collision that involved an injury or $1,500 of property damage that wasn’t investigated by a law enforcement agency at the scene, they must file an accident report within three days. They can find the reporting procedure and forms here.

Iowa Insurance Consumer Advocate

Part of the Iowa Insurance Division, the Consumer Advocate helps resolve pending complaints and clear up questions for policyholders.

Iowa Insurance Division: Market Regulation Bureau

Consumers can file complaints and see alerts about fraudulent or disciplined insurance companies.