Iowa Car Insurance Laws And Requirements 2025

Auto insurance is a key part of your legal and financial duties once you start driving. In Iowa, the law mandates that all drivers, whether their car is registered in Iowa or another state, must have proof of financial liability coverage.

The National Association of Insurance Commissioners reports that the average yearly auto insurance cost in Iowa is $708, which is 32% lower than the national average.

With 9 years of experience in auto insurance, I’ve helped drivers like you understand state requirements and find the best policy to suit your needs. Keep reading to learn more.

Is Car Insurance Required In Iowa?

Car insurance is required in Iowa. Drivers must carry proof of financial liability coverage, which helps cover costs if you’re involved in an accident. While Iowa doesn’t require collision or comprehensive coverage, liability insurance is mandatory.

It’s important to have this coverage before you start driving, even though you don’t need to show proof when registering your vehicle.

What Are The Minimum Car Insurance Requirements In Iowa?

In Iowa, the minimum car insurance requirement is liability coverage, which includes $20,000 for bodily injury or death per person, $40,000 for bodily injury or death per accident (if multiple people are injured), and $15,000 for property damage per accident.

This coverage helps pay for the costs of damages or injuries you cause in an accident. While the state doesn’t require collision or comprehensive coverage, liability insurance is mandatory for all drivers in Iowa to be legally on the road.

Is Minimum Coverage Enough?

Iowa’s liability limits are on the lower end compared to most states, meaning the minimum coverage might not fully protect you. Liability insurance doesn’t cover your vehicle, so if your car is newer or worth more than $4,000, you should consider adding physical damage coverage.

The $20,000 bodily injury limit can quickly run out if you injure multiple people, and the $15,000 property damage limit may not be enough to cover a new car. You can usually increase these limits at a low cost, and doing so can help protect you from significant financial risk.

Average Cost Of Car Insurance In Iowa

The cost of car insurance in Iowa depends on factors like age and gender. As shown in the table below, younger drivers typically pay higher rates than older drivers, whether they have minimum or full coverage.

Iowa Car Insurance Laws

Iowa follows modified comparative negligence when determining fault in an accident. This means both parties can share fault, but the other driver must be at least 51% responsible for you to recover damages.

Iowa is also a diminished value state, allowing you to claim the loss in your car’s value after an accident. Even if your car is fully repaired, its resale value decreases because of the collision. A diminished value claim helps you recover this lost value when selling your car.

Cancellation And Non-Renewal Notification Laws

Cancellation happens when your insurance company ends your policy before it’s due to expire. Non-renewal occurs when the company decides not to renew your policy when it reaches the end of its term.

If your policy is canceled for reasons like fraud, misrepresentation, or a suspended/revoked driver’s license, the company must notify you 20 days in advance. For cancellations due to nonpayment, the notice period is 10 days. If your policy is not being renewed, you’ll be notified 20 days before it ends.

Proof Of Insurance

In Iowa, proof of insurance is required to show that you have the necessary liability coverage to drive legally. While you don’t need to provide proof when registering your vehicle, you must carry it with you while driving. If you are stopped by law enforcement or involved in an accident, you must be able to show proof of insurance.

This can be in the form of a physical insurance card, an electronic copy on your phone, or a digital certificate from your insurance provider. Failing to provide proof of insurance can result in fines or other penalties.

Registration Information

To register your car in Iowa, you’ll need to provide the following information and documents:

• Proof of Ownership: This could be your title or a bill of sale if the car is new or recently purchased.
• Proof of Insurance: You must show proof of Iowa-required liability insurance coverage.
• Odometer Reading: The current mileage on your vehicle.
• Payment for Fees: Registration fees vary based on the vehicle’s age and weight.
• Identification: A valid driver’s license or state-issued ID.
• Emissions or Safety Inspection (if required): Some vehicles may need to pass an inspection before registration.

You can register your car at the county treasurer’s office in person, or in some cases, online, depending on your county’s services. Be sure to keep your registration and proof of insurance in your vehicle at all times.

Uninsured Drivers In Iowa

According to the Iowa Department of Transportation, about 11% of drivers in Iowa are uninsured. This higher rate is largely due to factors such as the cost of insurance and some drivers’ inability to afford coverage.

While Iowa doesn’t have no-fault laws like some states, the cost of insurance can still be a barrier for some drivers, leading them to go without coverage.

Is Car Insurance Required In Iowa If You Don’t Own A Vehicle?

Car insurance is still required in Iowa if you drive a vehicle, even if you don’t own one. Iowa law mandates that drivers must have proof of financial responsibility, which means liability insurance coverage, regardless of vehicle ownership.

If you frequently drive someone else’s car, you can purchase non-owner car insurance. This type of policy provides the required liability coverage when driving vehicles you don’t own.

Legal Penalties For Driving Without Insurance

Iowa’s car insurance laws require you to show proof of financial responsibility through liability insurance. This can be in the form of a physical card or a digital copy on your phone.

If you’re unable to provide proof of insurance, you could face penalties such as a $250 fine, having your vehicle impounded, a 12-month license suspension for damages over $1,500, or suspension of your vehicle registration.

Other Types Of Optional Coverage

In Iowa, while liability insurance is required, there are also several types of optional coverage that you can choose to enhance your car insurance policy:

1. Collision Coverage: Pays for damage to your vehicle if you’re in an accident, regardless of who’s at fault.
2. Comprehensive Coverage: Covers damage to your car caused by events other than accidents, such as theft, vandalism, or weather-related damage.
3. Uninsured/Underinsured Motorist Coverage: Protects you if you’re in an accident caused by a driver who doesn’t have enough insurance or no insurance at all.
4. Personal Injury Protection (PIP): Helps cover medical expenses and lost wages for you and your passengers, regardless of fault.
5. Roadside Assistance: Provides help if your car breaks down, such as towing, flat tire changes, or battery jump-starts.
6. Rental Car Coverage: Pays for the cost of a rental car while your vehicle is being repaired after an accident.

These optional coverages can help protect you from a variety of risks not covered by the state’s minimum liability requirements.