Iowa Car Insurance Requirements
Also known as the Hawkeye State, Iowa’s state motto reads: “Our liberties we prize and our rights we will maintain.” Evidence that they take their motto seriously can be found in the fact that the state has no compulsory financial responsibility requirement in order to register and drive a vehicle.
In the simplest terms possible, you can register a car and drive it without having to purchase insurance, post a bond, leave a cash deposit, or provide any sort of financial guarantee. However, that does not mean you don’t have to pay for damage or injuries you might cause in an accident.
If you’re involved in a crash that causes less than $1,500 damage, and you and the other party agree to work things out yourselves, nothing else need be done. You can both go on your way and pay for the damages as you see fit. Accidents that result in damages greater than $1.500 are handled differently.
Financial Responsibility after an Accident
Once you’ve been involved in a more serious accident you are then required to provide proof of financial responsibility. That proof can come in one of any number of forms including:
- a car insurance policy to pay for any future accidents (note: this does not free you from meeting the financial obligations of the current accident)
- making a $55,000 deposit with the Iowa Department of Driver Services
- getting a court ruling absolving you of any liability regarding the current accident
- filing a legal agreement to meet your financial responsibility through an installment plan
- filing a confession of judgment with the court, including an installment plan to meet your obligations
- filing an affidavit stating you and the others involved have settled all claims among yourselves
Choosing Liability Insurance
If you choose to use car insurance as your proof of financial responsibility after an accident, a minimum liability policy must include $20,000/$40,000 for bodily injuries and deaths, and $15,000 for property damage. You will still have to enter into a payment agreement to make good on the current accident.
Drivers who fail to meet financial responsibility requirements after an accident will lose their driving privileges and vehicle registration for a period of time. Once your license and registration are reinstated you will then be required by law to purchase car insurance.
Those who are required to have car insurance because of a previous violation must also carry proof of that insurance in their vehicles at all times. Failure to do so, or to purchase insurance when required, will result in heavy fines and loss of license and registration.