Automobile Insurance

The Iowa Insurance Division provides detailed information on automobile insurance on their website. To keep it simple, we will call automobile insurance “car insurance” on this page.

• Do I have to have car insurance?
• What if my insurance company cancels my policy?
• More resources on car insurance
• Iowa laws on car insurance

Do I have to have car insurance?

Iowa has what’s called a financial responsibility law. This law means that if you are going to drive in Iowa, you need to be able to prove that you can cover certain costs if you injure someone or damage their property. Iowa Code section 321.20B & section 321.1(24B). The most common way to satisfy this financial responsibility law is to get car insurance. Iowa law only requires you to buy liability coverage, meaning that if you cause an accident, your insurance will pay others for their injuries or damaged property up to your policy limits.

To satisfy Iowa’s liability insurance requirements, your policy will need to cover:

• $20,000 for bodily injury to or death of one person in an accident
• $40,000 for bodily injury to or death of two or more people in an accident
• $15,000 for injury or destruction of property in an accident

Iowa Code section 321A.21(2).

Make sure you keep an up-to-date insurance card with you. Iowa Code section 321.20B(1)(a).

Keep in mind, if you are in an accident and the person who was injured or whose car was damaged takes you to court, you would have to pay the difference between what the person is awarded and what your insurance company covers. For that reason, it can be a good idea to get more insurance coverage than what the law requires.

If you only buy liability insurance, your insurance company will not pay you for injuries or property damage you experience in an accident. Iowa Code section 516A.1 does require that auto insurance include uninsured, underinsured, and hit-and-run vehicle coverage up to the state liability minimum. (The law does allow you, though, to reject this coverage in writing. Make sure to read closely any document relating to your insurance to make sure you are not accidentally waiving this coverage.)

If you don’t own a car, but still drive, consider a non-owner auto-insurance policy.

What if my insurance company cancels my policy?

An insurance provider can end its relationship with you by canceling your policy or by not renewing your policy. For most people with car insurance, an insurance company must follow the Automobile Insurance Cancellation Control Act to cancel or not renew coverage. Iowa Code Chapter 515D.

When your insurance company tells you that your policy will be canceled or not renewed, you can request a hearing before the insurance commissioner within 15 days of receipt or delivery of a statement of reason. Iowa Code section 515D.10. The purpose of the hearing is limited to establishing the existence of the proof or evidence stated by the insurer as its reason for cancellation or intent not to renew.

Cancellation

Iowa Code section 515D.4 gives details on the reasons your insurance company can cancel your policy or exclude a person from your policy.

To cancel your policy, your insurance company needs to give you notice:

• At least 10 days before the effective date of the cancellation if the policy is being canceled for non-payment.
• At least 30 days before the effective date of the cancellation for other cancellation reasons.

Notice mailed to the named insured at the address shown in the policy is considered proof that the notice was received.

The notice must either include the reason your insurer is canceling your policy or information that you can request the reason for cancellation. Iowa Code section 515D.5(1).

A notice of exclusion of a person from your policy must be sent 20 days before the exclusion takes effect and must:

• Include the reason for the exclusion.
• Include information about the right to a hearing before the insurance commissioner.

Iowa Code section 515D.5(2).

Nonrenewal

An insurance company could also decide not to renew your policy when the current policy period ends. If an insurance company plans not to renew your policy, they must give you notice at least 30 days before the policy’s end date. Iowa Code section 515D.7. (Note, starting on January 1, 2025, the insurer must notify the insured 60 days in advance, rather than 30 days in advance.)

Insurers can't refuse to renew your car insurance policy solely because of:

• Age
• Residence
• Sex
• Race
• Color
• Creed
• Occupation

Insurers also can’t require you to have a physical examination to renew solely based on age “or other arbitrary reason.” If an insurer requires a physical exam, they have the burden of showing they have reasonable and sufficient grounds for the exam requirement. The insurer also has to pay for the expenses related to the exam. Iowa Code section 515D.6.