Auto Insurance Law

Financial Responsibility

Any suspension as a result of moving convictions or revocation for OWI and implied consent requires compliance with Iowa’s financial responsibility law.

This requirement is normally met by filing proof of at least $55,000 insurance coverage. Otherwise, you must post security of $55,000 by certified check, cashier’s check, money order, or surety bond. This filing must be maintained for two years.

Driver Protection

If you’re involved in an accident as either the driver or owner of a motor vehicle, or if your license has been suspended or revoked, you must show financial responsibility.

Iowa does not have a compulsory insurance law.

Instead, the Financial & Safety Responsibility Act protects you from the financially unsound and reckless driver. It does this by:

  1. Suspending the operating and registration privileges of a driver or owner who hasn’t been able to show immediate financial responsibility following an accident; and,
  2. By requiring anyone whose driver’s license has been suspended or revoked because of a conviction, unsatisfied judgment or violation of the OWI law to prove financial responsibility for any future damages or injuries that driver may cause.

Financial Responsibility After an Accident

Regardless of fault, an accident report must be filed with the Office of Driver Services within 72 hours if an accident results in bodily injury, death or total property damage of $1,000 or more. However, you will not be required to file a personal accident report if the accident was investigated by a law enforcement agency and the investigating officer files a report.

If you cause personal injury or damage exceeding $1,000 to the other party, you must next prove your financial responsibility. Otherwise, your license will be suspended.

You can prove financial responsibility in one of these ways:

  • Show that you are covered by automobile liability insurance at the time of the accident;
  • Post cash, cashier’s check, certified check, bank draft or postal money order payable to the Office of Driver Services;
  • Get releases from all other damaged or injured parties;
  • Obtain a decision resulting from a civil damage action relieving you of all liability;
  • File an agreement to pay the other damaged or injured parties on an installment plan;
  • Execute a warrant for confession of judgment which includes an agreement upon payment schedule;
  • File evidence of a complete settlement of all damages or injuries.

Owner & Driver Liability

Both owner and driver of the vehicles involved in an accident must prove their financial responsibility. This means if you owned the car involved in an accident but were not driving it at the time, you would still have to show financial responsibility by using one of the ways already discussed. Otherwise, you would lose all your registrations. The driver of your vehicle would also have to show financial responsibility or lose all licenses to operate motor vehicles.

Exemptions

Proof of financial responsibility after an accident isn’t needed in these cases:

  • Your car was legally stopped, standing, or parked;
  • Your vehicle was driven without your permission;
  • No damage occurred to any person or property other than yourself.

After Suspension or Revocation

Future proof of financial responsibility is required from the first day of your suspension or revocation for a conviction, unsatisfied judgment, or violation of the OWI law, and lasts for two years. Failing to show or maintain future proof suspends your license and registrations.

Methods of Proof

When you receive your suspension or revocation notice, file future proof in one of these methods:

  1. Have your Iowa Authorized insurance company file Form SR-22 (Certificate of Automobile Liability Insurance) with the Office of Driver Services.
  2. File a surety bond, cash, or securities equal to $55,000.
  3. Proof can be given for you by your employer’s insurance company if you operate a vehicle owned by your employer, or by the insurance company for the owner of the vehicle you drive, if you’re part of the owner’s immediate family. The insurance company must file Form SR22 for the person required to show proof.
  4. If you drive for an employer who owns a fleet of motor vehicles, your employer’s insurance carrier can certify proof by completing Form SR-23 (AAMVA Uniform Financial Responsibility Form). This covers you while driving your employer’s vehicles only.
  5. Proof can be given for you to operate a vehicle owned by a person who is issued a certificate of self insurance by the Iowa Office of Driver Services. The self-insured must give the Office a letter authorizing you to drive the certificate holder’s vehicle.
  6. To operate a vehicle owned by someone who has truck operator, motor carrier, liquid transport carrier, or interstate commerce carrier authority issued by the Office of Motor Carrier Services, Iowa Department of Transportation, the permit owner must send an authorization to the Office of Driver Services granting you permission to drive the vehicle(s) covered by the permit.

License Limitation

All license and registration privileges are limited to those vehicles for which you’ve shown proof. In other words, reinstated licenses are valid only for the motor vehicles that are covered by your future proof filing.

For example, your operator’s license that’s also valid for motorcycles is reinstated following suspension. Even though your license shows the motorcycle validation, you can’t legally drive your motorcycle until your future proof of financial responsibility covers it.

Non-Iowa Resident Responsibility

Financial responsibility after an accident and future proof of rules apply to non-residents as well. Non-residents cannot operate or be caught driving on a suspended license, or register any vehicle in Iowa until all requirements are met.