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Car Insurance

Authored By: Iowa Legal Aid

Information

toolboxThe cost of a vehicle is more than loan payments, gas and repairs. You have to also pay for car insurance. Iowa law requires every motor vehicle driver to be able to pay to cover injuries or damage caused to another person or his property. The insurance must be enough to cover damages of $20,000 resulting from the injury or death of one person, $40,000 in damages resulting from the injury or death of two people, and $15,000 in damages to someone's property. The easiest way to satisfy this requirement is buy liability insurance. You could also post a $55,000 bond, but insurance is easier for most people! Failure to be able to prove financial responsibility may lead to a suspension of your license if you're involved in an accident.

If you took out a loan to buy your car, there may be a requirement to have a certain amount of insurance on the car. It may be more than the minimum required by Iowa law. If you don't have the right amount of insurance, you may be in default on your contract, even if you are current on your payments. 

In addition to liability insurance, you should think about insurance that will cover damages caused by the other driver in an accident. Called "uninsured/underinsured" motor vehicle insurance, this insurance will help pay for the costs of an accident that aren't covered by the other driver's insurance. For example, if the driver who caused the accident carries insurance that covers $15,000 worth of damages to your vehicle but you've suffered $20,000 in damages, the "underinsured" part of your insurance will pay for the remaining damage. "Comprehensive" insurance covers damage to your vehicle unrelated to an accident involving another person.

Several things affect how much you'll pay for automobile insurance. For instance, older and younger drivers will generally pay more for car insurance. Men also generally pay more than women. Other factors that will affect how much you pay include where you live, the kind of vehicle you drive, the number of accidents and driving violations you've had in the past, and the number of miles you drive in a year.

Besides shopping around for the right car to buy, you need to shop around for the best car insurance. You can compare prices for car insurance by calling different companies or you can compare by using various auto insurance comparisons found on the Internet. Besides comparing prices you'll also want to ask friends and relatives for opinions. If an insurance company provides cheap insurance but is hard to work with after an accident the low cost won't be worth it.

 

Last Review and Update: Mar 02, 2021
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