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, some drivers in areas of Des Moines pays a few hundred dollars more on average than Ames does, just about 40 minutes south. You can see how nearly all ZIP codes in Iowa compare in the map below. You'll see the minimum and maximum rate from among six major insurers for the same policy, which shows how much you can save by comparing car insurance companies. For a customized rate, select the age group and coverage level that best matches your situation.
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.