Iowa drivers and owners of vehicles need to consider how damages will be covered if they are in an accident or if their car is damaged by hail, storm, or some other casualty. There are different ways to do this, including having different kinds of insurance. This article talks about the different kinds of insurance options available to Iowa drivers and owners for covering damages.
Liability Coverage
Iowa law says you cannot drive a vehicle in Iowa without financial liability coverage that will pay for damages caused by a vehicle accident. Most people meet this requirement by buying auto liability insurance. Liability insurance pays for the damages suffered by another party if an accident is your fault. For example, if you run a red light and hit another car, your liability insurance would pay for the damages to the other car and to people or property in the car. Note that liability insurance does not pay for damages to your car. (See discussion of collision coverage below). If you are in an accident that is your fault and do not have liability insurance and cannot pay for damages, the Iowa Department of Transportation may suspend your license. There are ways to get your license reinstated—but having insurance is the safest way to avoid a suspension.
Iowa law also says drivers must have current proof of liability coverage in vehicles they are driving. This is commonly called “Proof of Insurance” and is usually a small card sent to you by your insurance company with your insurance information. If you are stopped for any reason, a law enforcement officer may ask to see your proof of insurance. If you do not have it, you could get a costly ticket. If you are in an accident and do not have proof of insurance, you will also get a ticket. You should keep your proof of insurance card in your car at all times to show to an officer or to share information with other drivers if you are in an accident.
Uninsured/Underinsured Motorist Coverage
Another kind of car insurance you should strongly consider is uninsured/underinsured motorist coverage. This coverage pays for your damages if you are in an accident caused by a driver who either does not have any insurance or does not have enough insurance. For example, assume another driver with no insurance runs a stop sign and hits and totals your $20,000 car. If you have “uninsured motorist” protection, your insurance company will pay part or all of your damages. Likewise, if this driver only has enough liability insurance to cover $15,000 worth of damages and you have “underinsured motorist” coverage, your insurance company will pay for the remaining $5,000 in damages.
Be aware that the risk of being in an accident with someone without insurance is high. Recent statistics suggest that even though it is illegal to drive a motor vehicle that is not insured, one in eight motorists do not have car insurance. Many more may have only the minimum amount ($20,000 in Iowa) which may not be enough to cover all damages. Trying to save money by not getting this coverage could be costly to both you and your passengers. It helps that this coverage is usually not very expensive.
Collision Coverage
If you have a car that is fairly new or expensive to replace, you should consider collision coverage. Collision coverage will help pay to repair or replace your car if you cause an accident with another car or hit certain kinds of objects like trees or utility poles. For example, collision coverage will pay for damages to your car if you run a red light and hit another car.
Comprehensive Coverage
Comprehensive insurance coverage protects you against many physical damages that do not involve a collision. For example, it protects you from damages due to storms and natural disasters like tornadoes, as well as from damages due to vandalism and theft, broken windows and windshields, animals, falling objects and other similar types of damage. Iowa law does not say you have to have this insurance, but it can be a good idea if you can afford it.
Deductibles
Collision and comprehensive insurance coverage usually have a “deductible” amount. The deductible amount is what you have to pay out of your pocket before your insurance begins to reimburse you. For example, if your car is damaged by a fallen limb in a storm and you have comprehensive insurance coverage with a $500 deductible, then you would be responsible for paying the first $500 of the cost of repairing your car.
Making Your Insurance More Affordable
There are many ways to lower your car insurance costs:
- Increase the amount of your deductible.
- Improve your credit rating.
- Buy an older, less expensive car. If your car costs less to replace, your premium should be lower.
- Buying an older, less expensive car may also let you save on collision and comprehensive coverage. For example, it’s probably not necessary to have comprehensive and collision coverage on a car worth less than $1,000.
- If you have children who drive and are still in school, see if they qualify for a good student discount. It also helps if they have taken a Driver Education course.
- A good driving record will also keep the cost down – so consider slowing down, obeying all traffic laws and being extra careful.
- 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.
- Some insurance companies will lower their premiums if you take a Safe Driver Course.
- Many insurance companies offer multi-policy discounts. So you may be able to save by getting your home and auto insurance policies from the same insurer.
- Ask if your insurer has low-mileage discounts.
- Ask about safety discounts. If you car has lots of safety features, like anti-lock brakes or airbags, you may be able to lower your cost.
- Don’t drive without insurance. You could end up with higher rates in the future if you go without insurance. This is because insurance companies consider people who go without insurance to be high-risk.
It may take some time and effort to get the auto insurance coverage you need at the best rate, including uninsured/underinsured coverage, but it is worth it to protect you, your family and the passengers in your car!