Iowa, like every state, has a motor vehicle financial responsibility law. That's just a fancy way of saying that if you own or drive a car in Iowa, you'll need proof that you can pay for at least some of the
injuries and property damage you might cause in a wreck. If you're like most people, you'll comply with this law by buying an
auto insurance policy.
We cover the basics of Iowa's financial responsibility law, starting with a quick introduction to the state's fault-based auto insurance system. From there, we'll walk you through the minimum insurance amounts you must have to satisfy the law, what that insurance covers (and doesn't cover), how you can collect compensation if you're hurt in an accident, and more.
Bear in mind that you're on the hook for all damages you cause, regardless of whether you have enough insurance coverage, or not!
Talk to your insurance agent about how much liability insurance you need to protect your assets.
How will you be compensated if you're injured in an accident? The answer is likely to depend, at least in part, on who was to blame. If the wreck was the other driver's fault, chances are you'll file a
third-party insurance claim or a
lawsuit against them to recover your compensatory damages.
But what if the responsible driver is uninsured? Worse yet, what if you're the responsible driver? In either of those situations, you might decide to file a claim under your own auto or other insurance policies. To do that, you'll need to make sure you have the necessary coverages in place. Here are a few examples.
You're hit by an uninsured motorist (UM) or an underinsured motorist (UIM). Give some thought to what you'll do if you're hit by an at-fault
uninsured motorist or underinsured motorist. Under Iowa law, every auto liability policy must also have UM and UIM insurance coverages equal to the state's financial responsibility minimums, as discussed above. (
Iowa Code § 516A.1.1 (2023).)
But these aren't really required coverages, because the named insured is allowed to reject them, in writing. (
Iowa Code § 516A.1.2 (2023).) If you want this insurance, speak to your agent to make sure you haven't unknowingly rejected it.
You need to get your car repaired quickly. Suppose your car is damaged and can't be driven without repairs. If the accident was the other driver's fault, and if that driver is insured, you can collect the repair or replacement cost from their liability insurance.
Here's the problem: It's likely to take some time—time you can't afford to wait—to settle your claims with the other driver's insurance company. Until that happens, your car might have to remain out of commission unless you have some other way to pay for repairs.
If you have optional
collision coverage as part of your auto policy, you can get your car fixed or replaced much more quickly. Note that collision insurance is a form of no-fault coverage, so it will cover your auto repairs even if the accident was your fault.
You have health insurance that will pay your medical bills. If you have a
health insurance plan, you can almost certainly submit your medical expenses for payment or reimbursement under that policy. Once you settle with the responsible driver, your health insurer likely will expect to be reimbursed for any amounts it paid.
What happens if you're caught driving without auto insurance (or other proof of financial responsibility) in Iowa? The police officer who stops you can:
- issue a warning
- issue a citation
- issue a citation and remove your vehicle's license plate and registration, or
- issue a citation, remove your vehicle's license plate and registration, and impound your vehicle.
(
Iowa Code § 321.20B.4.a (2023).)
Here's where things start to get expensive. The fine for driving without insurance is $325, if you didn't cause an accident. When you cause an accident, the fine is $645. (
Iowa Code § 805.8A.14.f (2023).) You'll have to pay an administrative fee ($15) to the county treasurer to get new license plates if your original plates were removed. If your car was impounded, you must pay the towing and storage charges (likely several hundred dollars) to get it back.
If you cause an accident that results in personal injuries or property damages of more than $1,500, your driver's license and vehicle registration will be suspended if you can't post security to cover the estimated damages. (
Iowa Code § 321A.5.1 (2023).) The suspension will last for a year unless you're able to post the necessary security. (
Iowa Code § 321A.7 (2023).) Driving while suspended is a misdemeanor. (
Iowa Code § 321A.32.1 (2023).)
On top of everything else, you still need to comply with Iowa's financial responsibility law. Needless to say, your auto insurance premiums are likely to increase substantially.
While Iowa's financial responsibility requirements are fairly straightforward, insurance coverages are a different matter. Understanding what insurance you need, and how much you need, can be confusing and difficult. If you have questions about your auto insurance situation, your best bet will be to speak with your insurance agent or your attorney. They can explain the coverages, and the coverage amounts, that are best for you.
Learn about Iowa's fault-based auto insurance, how much insurance you're required to have, what's covered (and not covered) and more.
www.nolo.com
Most car accidents result in damage and loss for all parties involved, especially if it is severe.
Therefore, many people end up paying high medical bills, property repairs, lost wages, and more.
Drivers involved in such incidents could be liable for damages. In order to pay for them, they have two options: file a claim against their insurance policy's no-fault coverage or against the at-fault party's liability coverage.
However, the alternatives available to the drivers depend on the state where they are, as some follow at-fault rules while others have a no-fault system.
What happens if the driver is in Iowa? Is Iowa a no-fault state for car accidents? Here's what the state laws say.
In a no-fault state, when there is a car accident, each driver can file a claim with their respective insurer to cover related expenses, regardless of who was at fault.
However, unlike Minnesota and other states governed by no-fault laws, Iowa is an at-fault state.
In other words, the car insurance laws in this state indicate that the driver who causes the accident is held responsible for the injuries and losses of the other.
Iowa handles car accident cases under a fault system that determines who is financially responsible for the incident, injuries, vehicle damage, and other consequential damages.
Therefore, the party that is held accountable must use their insurance to pay the other driver the expenses related to the accident.
Under the state's traffic laws, all drivers must have adequate insurance for their safety and property.
Iowa law states that all drivers must have a policy with minimum liability coverage, including:
- $20,000 for bodily injury or death to one person in any vehicular accident
- $40,000 for bodily injury or death to two or more people in motor vehicle incidents
- $15,000 for damage or destruction of property owned by others
A driver involved in an accident who fails to show
proof of insurance could face several penalties, including:
- A fine of $250
- License suspension for one year if damages caused exceed $1,500
- Vehicle impoundment
- Vehicle license plate suspension
The state of Iowa relies on the modified comparative negligence system to determine fault in an accident.
While this means that both parties involved could be held accountable for the collision or damage, this system determines that a driver can recover damages only if the other is at least 51% at fault.
Compensation is limited based on the percentage of fault, meaning the amount can be reduced according to the plaintiff's liability.
If a driver was 71% at fault in an accident in a case that awarded $10,000 in the ruling, the plaintiff receives $7,100.
Iowa law states that compensable damages are:
- Medical costs
- Vehicle repair
- Property replacement
- Pain and suffering
- Lost wages
- Wrongful death
- Car rental after a property loss or damage
Since Iowa is an at-fault state, people who are involved in a car accident due to others' negligence or wrongdoing have the right to take legal action and seek compensation for economic and non-economic damages.
In this sense, victims can:
- Make a claim against the at-fault party's insurance company
- File a lawsuit against the other driver if they were negligent and caused the accident
- Make a claim on their own insurers if they have comprehensive coverage
Anyone who has suffered injuries or losses in a car accident caused by another driver can seek legal assistance and take legal action to obtain the compensation they deserve.
Iowa is an at-fault state, so the car insurance laws indicate the driver who causes the accident is held responsible.
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