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Auto Insurance Laws in Iowa

Auto insurance laws in Iowa require financial responsibility for all drivers, even on specialized policies such as vintage vehicle car insurance. This means that although it is not technically required that we all carry auto insurance policies, we all must be able to meet our financial obligations in the wake of at fault accidents according to the demands set forth by the minimum requirements of the law. For almost all drivers in the state, this means buying a liability auto insurance policy, because the other options require a large amount of cash to be put down, and most of us simply do not have that kind of liquidity.

Liability Insurance for Iowa Drivers

Iowa liability insurance protects motorists in multiple ways. It keeps them from having to personally pay for the medical expenses of anyone they may hit in an at fault car accident. This saves us potentially thousands of dollars as drivers if we ever find ourselves in these types of circumstances. But it also saves motorists who are insured under these policies from dealing directly with the total cost of repairing property damage or replacing totaled property suffered by other drivers or property owners who might have been involved in such an accident. The exception to both of these, of course, is the elected deductible level included in a liability car insurance policy. The insured driver is responsible for that portion of the payout when an at fault accident occurs.

In addition, as covered motorists we are also solely responsible for taking care of any and all damages that go above and beyond the limits of our Iowa auto insurance liability coverage. Just because you do not have enough insurance to pay for the entire cost of an accident does not mean you are absolved of responsibility for that cost. The entire total of any expenses that accrue or that a court orders the negligent driver to pay are that driver's responsibility. Since Iowa is a financial responsibility state, this means that courts can come after personal assets and property in order to force the liable motorist to meet their obligations under the terms of the law.

Iowa Minimum Liability Insurance Requirements

The state of Iowa sets forth minimum levels of acceptable financial responsibility for its drivers and auto owners. Regardless of whether you actually own a car, if you drive on state roads in private passenger vehicles you must be insured or go through other acceptable arrangements to establish financial responsibility, either by purchasing a bond or by other approved means. Drivers who choose to self insure in this manner have to be prepared to pay out damages up to the minimum mandatory limits set forth by the law. These limits are as follows:

For bodily injury liability involving only one injured person requiring medical care, the minimum limit is $20,000. For bodily injury liability for more than one injured person, the minimum is $40,000. And for property damage liability, the minimum coverage required for all drivers in the state of IA is $15,000 [1]. Notice that there are three separate dollar amounts. This is what is called a split limit system for liability insurance.

Split Limit Liability Auto Insurance

Many, though not all, states in the U.S, utilize this system. There are significant advantages as well as some drawbacks to it for drivers. The major advantage is the cost factor. As opposed to a single limit liability policy, drivers pay less because there is less likelihood that they will ever exhaust all the available resources. In a single limit plan, if the medical expenses were high, more money could be devoted there. Conversely, if property damage amounted to a high dollar figure, more of the coverage could be devoted to that expense. In any scenario, a split limit liability auto insurance policy comes with deductibles for each part.

This is in contrast to single limit plans, which come with only one deductible. This is one of the main drawbacks for Iowa drivers who are under split limit plans. We pay two deductibles if money is used from both bodily injury and property damages coverage. This along with the fact that it is harder to use up all of our coverage explains why our rates are lower than they would be under the other type of system.

There are definite advantages to Iowa liability car insurance. Drivers get lower rates than they would if their plans were structured differently. But we pay the price sometimes when we get into accidents. The best way to save money on Iowa liability auto insurance is to avoid accidents. Once you're familiar with Iowa auto insurance laws, if you can stay accident free, your rates will remain low. This can help you afford to increase coverage beyond the state minimum or add comprehensive and collision coverage to round out your insurance policy.

[1] http://www.iid.state.ia.us/about_us/consumer.asp Retrieved 2010-08-08.

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