Iowans enjoy comparatively low state car insurance rates, thanks in part to the lack of large urban areas, where drivers tend to crash more and file claims more frequently. Even so, Sioux City pays a few hundred dollars more on average than Ames does. You can see how all ZIP codes in Iowa compare in the map below.
Iowa state law requires the following minimum car insurance coverage:
Minimum bodily injury liability
Minimum property damage liability:
Iowa Car Insurance Rates by ZIP Code & City
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CarInsurance.com commissioned Quadrant Information Services to provide a report of average auto insurance rates for a 2014 Honda Accord for every ZIP code in the United States. We calculated rates using data for six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm).
Averages are based on insurance for a single 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. This hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage. Average rates are for comparative purposes. Your own rate will depend on your personal factors and vehicle.
Financial and Safety Responsibility Act: Iowa doesn't have a compulsory insurance law. Instead the state's Financial and Safety Responsibility Act requires that if you cause injury or property damage to others you have the financial means to cover the incident.
The easiest way to show financial responsibility is with an auto insurance policy. If using this method, Iowa drivers must buy minimum liability coverage of $20,000 per person and $40,000 per accident for bodily injury liability and $15,000 of property damage liability.
Those limits are on the low side. If you have savings and a home you'd like to protect, think about going even higher, such as 100/300/50.
Alternatives to insurance: If you don't purchase an Iowa auto insurance policy, Iowa Code also defines financial liability coverage as including:
filing a certificate of deposit with the treasurer of state ($55,000); or
a valid certificate of self-insurance.
Proof of financial responsibility is still needed: Iowa code 321.20B requires that proof of financial responsibility be provided to a peace officer upon request. If you are unable provide proof, the officer may cite you. Officers also have the authority to remove your plates and registration and even impound your vehicle.
After an accident: The Iowa Department of Transportation explains that if you're in a car accident where damages or injuries of the other party exceed $1,500, and you're unable to immediately provide proof of financial responsibility, your driving and registration privileges will be suspended.
Accident surcharge: In Iowa, an insurer can impose a surcharge on you for accidents you were involved in for the past five years. The rate increase will vary by company, so it pays to shop around if you've been in an accident.
Cancellation: For the first 60 days your Iowa insurance company can cancel your policy for any reason. After 60 days, the policy may only be cancelled for the specific reasons outlined in your policy.
Pay on time: The Hawkeye State's insurance law doesn't give you a grace period for paying your car insurance premiums. Pay on or before your due date or you risk losing your coverage.
Negligence law: If you're in an accident, be aware of Iowa's "modified comparative negligence law." That means drivers in an accident could both be found partially at fault. The threshold in Iowa is 51 percent: If you are 51 percent or more at fault, you will not be able to make a claim for damages from other party's auto insurance company.
Uninsured motorist penalties for Iowa: You may be fined $250, have your car impounded and your plates confiscated.
Driving without a license: Driving without a license in Iowa is a simple misdemeanor and can cost you anywhere from $250 to $1500.
No age restriction for insurance: Iowa has no age restriction for owning a car and getting insurance, but minors will need an Iowa instruction permit and a parent to sign their insurance policy. Iowa is one of the few states that allows a teen driver as young as 14 to get an instruction permit and start to drive.
Proof of insurance via smartphone: Iowa law allows drivers to show electronic proof of insurance during a traffic stop. Thirty-one states total allow this.
Largest car insurance companies for Iowa by market share
Company / Group
Direct Premiums Written ($)
Market Share (%)
State Farm Group
Progressive Insurance Group
Farm Bureau P&C Group
Amer Family Insurance Group
Grinnell Mutual Group
IMT Insurance Companies
Berkshire Hathaway Insurance
Allstate Insurance Group
Farmers Insurance Group
Source: A.M. Best market share Rankings are based on direct premiums written in 2013.