Updated on 06.20.16

Car Insurance in Iowa

Vanessa Clark

I saved $1300 by spending 30 minutes shopping around for auto insurance in Iowa!

Iowa is the 4th least expensive place to own a car in all of the country. That’s particularly interesting, because, In all my experience shopping for car insurance, I have never seen so many varying quotes for the exact same coverage. I’m not kidding when I tell you that I saved $1300 by shopping around and gathering different quotes — and the less expensive coverage was actually more comprehensive.

I received four quotes from various reputable and excellent-standing insurance companies. Like I said before, they all varied so immensely you really have to be careful and be smart about who you end up going with. I always recommend people shop around, but it’s even more imperative in Iowa where shopping around can save you over a grand of your hard-earned money per year. Just because a company was the cheapest for me doesn’t mean that’s a one-size-fits-all situation.

Of the four I looked at, all were easy online quote generators, which was nice, because insurance salespeople can be a bit pushy and sometimes you just want to be able to look at your options in peace. The process of customizing your quote to be exactly what you want is so simple and easy that there’s no reason you can’t spend an afternoon making sure you’re getting the absolute best insurance for your personalized needs. Grab a cup of coffee and dive into the world of auto insurance — I promise it’s more fun than it sounds! (I mean, what’s more fun than saving money?)

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Our Top 4 Picks for the Best Car Insurance in Iowa

I began my search with the four companies in the table below and didn’t even bother with any companies that weren’t in excellent standing with A.M. Best and JD Power.

Insurer My quote
State Farm $964
Shelter Insurance $1,182
American Family $1,677
Allstate $2,292

There is no use having insurance from providers that are not in superior and excellent financial standing. You don’t want to waste your time haggling over the tiniest of things because you think you can save a few dollars going with a company that isn’t a higher-tier provider. That’s why I chose companies with top scores from A.M. Best and JD Power. A.M. Best is a financial strength rating agency that assesses a company’s long-term stability, and JD Power is a global leader in auto insurance customer satisfaction tests. So between the two criteria, you should be able to trust that you have chosen a company that will deliver on their value if you ever need them to.

As you can see above, the price differentiations were staggering and what I think this is about is because Iowa actually does not have a minimum coverage requirement. I’ll get into that a little bit later in the post, but I think there is much less competition for Iowan auto insurance business, so it allows for companies to stagger their rates based on reputation alone. Allstate is probably the more well-known option here and they are over double what State Farm is charging for actually less extensive coverage (the $2292 quote didn’t include roadside assistance or rental car coverage whereas the other quotes did include those things). Allstate also does not offer any higher deductible beyond $1,000 for Collision or Comprehensive coverage, which makes their prices steeper than the others, which all were quoted for a $2,000 deductible on both Collision and Comprehensive.

From my searching, I’d go with State Farm Insurance, simply because of the extraordinary value, as opposed to the other three companies I looked at. They were much less than the others with the exact same coverage — and their reputation is as good as the other companies — so it’s a no-brainer for me to recommend State Farm.

Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years

Insurers don’t just use calculate your rate based upon risk anymore; they use a controversial tactic called price optimization, which uses a ton of information about potential and existing customers to determine how comfortable you’d be with a rate hike. That information allows providers to charge you just enough to maximize profit, but also to keep you from being suspicious. And if they think you wouldn’t leave them for a different company, they’ll absolutely take advantage of you.

Shopping for a new policy every year or so is great for two reasons. First off, it prevents you from being marked as someone willing to pay a higher rate. Insurance companies want to maximize their profits, but they also want to keep your business. Secondly, if insurers fear you’re going to move to the competition, they won’t take the chance of raising your rates.

Fifteen states have addressed (and banned) price optimization, but unfortunately, Iowa is not one of them. That said, it’s up to you to make sure that you’re paying a rate that’s based upon you as a person, not algorithmic predictions.

Iowa’s Minimum Coverage

The Bare Minimum

I was surprised by this, but Iowa is one of the very rare states where you are not legally required to have auto insurance. However if you do have an accident, you need to be able to show financial responsibility in that moment. If you do not show proof of financial responsibility for the accident, your driving privileges could be revoked. Therefore, it’s recommended that you get insurance, even though you technically don’t need it.

If you do get insurance, there are minimums you need to comply with, but they are fairly standard. They are as follows:

  • $25,000 for the injury or death of one person (yourself, a passenger, another driver, pedestrian, etc.)
  • $40,000 for the total damages caused by a single accident, and
  • $15,000 for property damage.

The Best Car Insurance is Not Just Cheap Car Insurance

It’s just not worth it to drive without insurance; the risk is too high. When I obtained quotes, I sought basic coverage and found the yearly premiums to be far less risky than driving without insurance.

Let’s take a look at these two important statistics:

  • On average drivers (probably including myself) have an accident every 17.9 years.
  • The average cost of an accident that causes a disabling, but nonfatal injury is $80,700.

Without the state’s recommended minimum insurance, I could wind up paying over $55,000 dollars if I got in a serious wreck — and that’s if I only hurt one person. If I injured multiple people, I could owe far more than that. However, If I upgraded my State Farm coverage to $100,000 of bodily injury coverage, my yearly rate would only be $341 more expensive. That sounds like a bummer, but over 18 years that $341 becomes a mere $6,138, which is way less than $55,000. To be liable such a sum of money without insurance would be one of those moments you would regret. It’s worth it to have the best car insurance possible — even if Iowa doesn’t lawfully require it.

What happens if I’m caught without insurance?

Iowa requires that you must always be able to prove your financial responsibility, or face license suspension. You can prove liability in any of the following ways.

  • Post one of the following payable to “Office of Driver Services”:
    • Cash.
    • Certified check.
    • Cashier’s check.
    • Bank draft.
    • Postal money order.

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Beat the Average Premium: 9 Ways to Snag Cheap Car Insurance Rates

A good policy in Iowa is still going to be much more affordable than a cheap car insurance policy in somewhere like Florida or California. You have a lot of flexibility in Iowa simply because of the low minimum requirements, so that means you can shop around, change values and insurance levels, and get a policy that works best for you. Plus, there are plenty of simple steps you can take to knock some money off your annual rate — just take a look at the chart below for ideas.

Nine Ways to Lower Your Car Insurance


Why is it so great to be a car owner in Iowa?

What to Expect
Average Monthly Premiums
United States $139
Iowa $83
Council Bluffs $100
Davenport $86
Des Moines $85
Sioux City $85
Waterloo $82
Dubuque $81
Cedar Rapids $78
Iowa City $74
Ames $73
Source Quadrant

Low minimums mean that you get to build and customize your own insurance quote based on your driving habits. This is a really valuable thing, because most states require a certain amount of coverage that you don’t have a choice in. But, lucky you, you’re from Iowa where you are free to choose the best type of coverage for you. More options create more competition, and that means lower rates for you.

What if I’m not a full-time resident?

If you’re commuting from another state seasonally or temporarily — not exceeding 90 days — your state’s insurance will apply. However, if this is not true of your residency, then your vehicle needs to be registered and, if you choose to have insurance, insured in Iowa.

The Bottom Line

I say the best thing you can do in Iowa is to cover yourself the best car insurance possible, simply because you can — and because it won’t hurt your wallet to do so. And the only way to find the company that’s a perfect fit is to comparison shop. So grab that cup of coffee, whip out your laptop, and get to it.

Get Quotes Now

Enter your zip code to compare rates from some of my top recommendations.

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