A car crash is stressful on its own. It gets worse when the driver who caused it has too little insurance to pay for your medical bills and repairs. If that happened to you in Iowa, you may be wondering where the money will come from. This guide explains how Iowa insurance rules work, what coverage may help you, and what to do next. It also covers what can happen to a driver who carries too little insurance.
What Counts as an Underinsured Driver in Iowa
A driver is underinsured when their liability policy is too small to cover the harm they caused. Say a driver breaks your leg and your bills reach $60,000. If their policy pays only $20,000, you are left with a large gap.
Iowa’s Minimum Insurance Requirements
Iowa law requires every vehicle to carry liability insurance. This coverage pays for injuries and property damage a driver causes to other people. The minimum limits are:
- $20,000 per person for bodily injury
- $40,000 per accident for bodily injury
- $15,000 per accident for property damage
These numbers are only a starting point. One hospital stay can cost more than $20,000, and a newer car can cost more than $15,000 to replace.
How Common Is Driving Without Enough Coverage
Industry estimates suggest about one in ten Iowa drivers has no insurance at all. Many more carry only the minimum. That means there is a real chance the person who hits you cannot pay for everything.
Insurance That May Pay When the Other Driver Falls Short
Underinsured and Uninsured Motorist Coverage
Iowa auto policies include uninsured motorist (UM) coverage unless the policyholder rejects it in writing. Underinsured motorist (UIM) coverage falls under the same rules. UM helps when the at-fault driver has no policy. UIM helps when their policy is too small for your losses. Both pay for bodily injury, which can include medical bills, lost income, and pain and suffering. The minimum limits are $20,000 per person and $40,000 per accident, and you can buy higher limits. Check your policy to see your limits and whether you ever signed a rejection.
Collision Coverage for Car Damage
UM and UIM do not pay for vehicle damage. That job belongs to collision coverage, which is optional. If you skipped it, you may have to seek repair costs from the at-fault driver.
Suing an At-Fault Driver Who Can’t Pay Enough
If your losses are bigger than the insurance available, you may be able to sue the driver for the rest. A court can order them to pay from personal assets, and wages may be garnished over time. Still, many drivers who buy only minimum coverage have few assets, so collecting can take years or bring in very little. That is why your own coverage matters so much. A lawyer can review the facts and tell you if a lawsuit makes sense.
What to Do After the Accident
What you do in the first days can affect how much you recover. Follow these steps:
- Call the police and stay at the scene. Iowa law requires you to report crashes that involve injury or death.
- Get the other driver’s details. If they leave, do not chase them. Write down the plate number and a description of the car.
- Get medical care. Tell the doctor about the crash and any symptoms, since your records will support your claim.
- Tell your insurer. Many policies require notice within a few days. Talk to an attorney before you give a detailed statement or start the claim.
- Start an evidence folder. Include photos, medical records, pay stubs, repair estimates, and anything about the other driver’s insurance.
- Contact a car accident attorney and bring your folder.
If You Were the Driver Without Enough Insurance
Some readers are on the other side of this. If you caused a crash and your insurance fell short, you may hear from the Iowa Department of Transportation (DOT) before anyone files a lawsuit.
DOT License or Registration Suspension
If a crash involves an injury, a death, or more than $1,500 in claimed damages that your insurance does not fully cover, the DOT may send you a notice. It says your license will be suspended unless you pay “security,” which means the amount the other side claims for damages. If someone else was driving your car, the DOT may block you from getting a new registration. The suspension can last up to one year and does not require a lawsuit. The other side generally does not have to prove its damages for the DOT to act, and many people cannot afford the amount.
Ways to Appeal or Avoid a Suspension
You can appeal within the time listed on the notice. You may have grounds if any of these apply:
- Only the uninsured person was hurt or had damage
- Your vehicle was legally stopped or parked
- Someone drove your vehicle without your consent
- You received a release from liability from the other driver
- A court order says you are not liable
- You are not at fault, such as when the other driver admits blame, the police report points to them, witnesses support you, or they were convicted of a violation that caused the crash
- The other driver or their insurer accepted liability and paid
- You filed bankruptcy covering all claims from the crash
You can also avoid a suspension by sending proof of any of these to the DOT before the suspension date, or by signing a written payment agreement with the other side. Be careful with a confession of judgment. It becomes a court judgment against you, and you get no notice and no chance to tell your side. Talk to a lawyer before you sign one, agree to a payment plan, or admit fault. You can also ask the other side to show proof of the damages they claim.
If you miss the deadline or lose your appeal, the suspension stays until you pay the DOT amount, 12 months pass with no lawsuit reported, you file proof such as a release, a final court ruling in your favor, a confession of judgment, or a payment agreement, or you file bankruptcy that includes the debt.
Lawsuits and Judgments
The other driver or their insurer can also sue you. If you have some insurance, call your insurer first, because your policy may provide a lawyer. To avoid a judgment, you generally must show the crash was not your fault or that your coverage pays the full claim. The other side must prove the dollar amount of its damages. If a judgment is entered and you cannot pay it, your license can be suspended again. You can get it back with written consent from the person holding the judgment, by paying in full and getting a receipt from the clerk of court, by filing bankruptcy that includes the judgment, or by asking for a hearing where a judge can set a repayment plan even if the other side disagrees.
Frequently Asked Questions
What if the other driver’s policy is smaller than my medical bills?
Start with your own underinsured motorist coverage, if you have it. It can pay for losses above what the other driver’s policy covers, up to your limits. If your losses are higher than both, you may be able to sue the driver for the rest.
Will my insurance pay for my car repairs?
Only if you have collision coverage. UM and UIM cover bodily injury, not vehicle damage. Without collision coverage, you would need to seek repair costs from the at-fault driver.
How long do I have to file a claim in Iowa?
Iowa generally allows two years to file a lawsuit for injuries and five years for property damage. Your insurance policy may set shorter deadlines to report the crash or make a claim, so act quickly. An attorney can confirm the deadlines for your situation.
Get Legal Help After an Iowa Car Accident
Ball, Kirk & Holm helps people across Iowa who were hurt by drivers without enough insurance. Our team can review your policy, deal with the insurance companies, and explain your options for recovering what you are owed. If you have questions about your claim, or you are facing a DOT notice after a crash, call 319-234-2638 for a free consultation to talk with a lawyer today.