Iowa is the fourth least expensive state in which to own a car, but when it comes to insuring a car, prices are all over the place for the same coverage. You can save a significant amount by shopping around and gathering different quotes. And you might find that the less expensive coverage may actually be more comprehensive.
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Look for quotes from various reputable car insurance companies, but be smart and careful about which one you select. You should always shop around, especially in Iowa, where it could save you over a grand of your hard-earned money per year. Just because an insurer is the cheapest option for one driver doesn’t mean that one size fits all.
Our Top 3 Picks for the Best Cheap Car Insurance in Iowa
You should never buy insurance from providers that do not have a strong financial standing. You don’t want to waste your time haggling with a company that isn’t a higher-tier provider. The companies listed here have the top scores from A.M. Best and J.D. Power. A.M. Best is a financial-strength rating agency that assesses a company’s long-term stability, and J.D. Power is a global leader in car insurance customer satisfaction surveys. With solid ratings from these two sources, you should be able to trust that you have chosen a company that will handle and pay claims professionally and efficiently when you need it to.
The price differences among these three insurers are staggering, probably because Iowa does not have a minimum coverage requirement. There is much less competition in the Iowa car insurance market, which allows companies to set rates based on reputation alone. Allstate is probably the more well-known option, and it is $340 higher than State Farm. We asked the insurers listed here to provide quotes for a $2,000 deductible on both collision and comprehensive coverage, but Allstate does not offer deductibles higher than $1,000, which makes its prices steeper.
Consider going with State Farm insurance because of the extraordinary value and its reputation, which is as good as the other companies.
Iowa’s Minimum Coverage Requirements for 2020
Iowa is a rarity in that you are not legally required to have car insurance, but you must be able to show financial responsibility. If you have an accident and cannot show proof of financial responsibility, your driving privileges could be revoked. Therefore, it’s recommended that you get insurance, even though you are not required to have it.
If you do get insurance, there are minimums you need to comply with, but they are fairly standard. They are:
- $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
- $15,000 for property damage
Why is it so great to be a car owner in Iowa?
Low minimums mean that you can customize your insurance based on your driving habits. This is a valuable thing because most states require higher amounts of coverage and you have no choice. However, 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 you’re not a full-time resident of Iowa?
If you’re commuting from another state seasonally or temporarily — not exceeding 90 days — your home state’s insurance will apply. If you live in Iowa, however, your vehicle must be registered there. And if you choose to have insurance, it must be insured in Iowa.
What is the difference between collision and comprehensive insurance?
When you are purchasing car insurance coverage, you may wonder whether you should get collision and/or comprehensive insurance. Collision insurance covers damage due to a rollover, hitting a pothole or colliding with another car or object while driving. Comprehensive insurance, on the other hand, applies when your car is damaged in a natural disaster, when it is vandalized or stolen, when you hit an animal or when an object falls on your car.
In order to determine which type of insurance you need, you need to consider your driving habits and where you live. If you have a higher accident risk because you drive frequently or drive through wooded areas with a lot of branches or wild animals, those factors could help you determine the type of coverage you need. Likewise, think about the current value of your car; if it is valuable, you might want more coverage. Finally, consider your current savings and how much you would be able to pay in the event of an accident. These various considerations can help you decide whether collision and/or comprehensive insurance is right for you.
Should you consider buying insurance beyond the bare minimum?
Let’s take a look at these important statistics:
● On average, drivers have an accident every 17.9 years.
● The average cost of an accident that causes a disabling but nonfatal injury is $93,800.
Without the state’s recommended minimum insurance, you could wind up paying over $70,000 if you got into a serious wreck — and that’s if you hurt only one person. If you injured multiple people, the costs would escalate.
To protect yourself, you could get more than the minimum liability coverage. For example, if you upgraded your State Farm coverage to $100,000 of bodily injury coverage, your yearly rate would be only $166 more. Over 18 years, an extra $2,988 is nothing compared with the tens of thousands of dollars you might have to pay out of pocket if you had a serious accident. To be liable for such a sum of money without insurance would fill you with regret. That’s why it’s worth it to have the best car insurance possible — even if Iowa doesn’t lawfully require it.
Do you need no-fault insurance in Iowa?
In no-fault insurance states, drivers are covered by their own insurance, regardless of who is at fault in an accident. Iowa is an at-fault state that uses a tort system to determine blame and payment requirements for the driver who is to blame for the accident. Iowa’s comparative negligence system means that both drivers are investigated and assigned a percentage of the blame, and each driver must pay the damages at those determined percentages. Therefore, you do not need no-fault insurance to drive in Iowa. Instead, you can stick to your insurance company’s typical plan options.
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What happens if you’re caught without insurance?
The practical consequences of driving with no insurance are the same in Iowa as they are in other states. If you are in a car accident without insurance and you are at fault, you will be stripped of your license and registration for up to a year. In this case, you may need to get an SR-22 certificate before you will be able to have your license and registration reinstated. This can be a complicated and expensive process, so it’s better to always carry car insurance as long as you are driving.
How do you prove that you have car insurance?
Iowa requires that you must always be able to prove your financial responsibility, or you could face license suspension. You can prove liability by posing one of the following payable to “Office of Driver Services”:
- Certified check
- Cashier’s check
- Bank draft
- Postal money order
What is SR-22 insurance?
If you have a bad driving record, such as a DUI or other serious offenses, you may need an SR-22 certificate in order to get your license and/or registration reinstated. An SR-22 is a document that your insurer files with the state to prove your financial responsibility, and it is often very expensive.
When you face the loss of your registration or your license, the state will often demand that you provide an SR-22. Typically, after a few years under SR-22 with a clean driving record, you are no longer required to have it.
Take the Time to Shop Around for New Insurance
Insurers don’t calculate your rate based on risk alone anymore; they use a controversial tactic called price optimization, which collects and analyzes a ton of information about you (including your online shopping habits and social media activity) to determine how you would react to a premium hike. If the data says you’d be passive and not shop for a better rate, the insurer takes advantage of that to optimize profits. The rate hike is often just enough to maximize profit but keep you from being alarmed. If the companies think you won’t leave them for a different company, they’ll absolutely take advantage of you. Young drivers, bad drivers, and those with low credit will also experience higher rates.
Shopping for a new policy every year or so is great for two reasons: First, it prevents you from being marked as someone willing to pay a higher rate. Insurance companies want to increase 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 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 on your risk profile and not predictive analytics.
Best Car Insurance in Iowa
- State Farm
- American Family
The best thing you can do in Iowa is to cover yourself with the best car insurance you can afford. The only way to find a company that’s a perfect fit is to comparison shop. So, grab a cup of coffee, get out your laptop and get to it.