Unlike many other states, Iowa does not have a compulsory insurance law for drivers. However, the Financial & Safety Responsibility Act states the following:

• A driver who can't show immediate proof of financial responsibility following an accident will have his/her license and registration privileges suspended.

• If your driver's license has been suspended or revoked because of a conviction, unsatisfied judgment, or violation of the OWI law, you are legally obligated to provide proof of financial responsibility to maintain your license and registration.

Ways to Establish Financial Responsibility

The most common way to establish proof of financial responsibility is to obtain a valid liability insurance policy. However, you may also prove financial responsibility by doing one of the following after you've been involved in an accident:

• Pay cash or post a cashier's check, certified check, bank draft or postal money order payable to the Office of Driver Services for all expenses associated with your accident.

• Obtain official releases from all parties involved in the accident.

• Agree to pay the injured drivers or people with property damage on an installment plan.

• Execute a warrant for confession of judgment with a damage payment schedule, thus eliminating your right to defend against the charges.

• Submit proof documenting a full settlement of all damages or injuries.

• Submit a copy of civil damage action decision that relieves you of all liability for expenses relating to the accident.

Please note that Iowa's Financial & Safety Responsibility Act applies to both the driver and the owner of the vehicle. If you allow a friend to borrow your vehicle and he/she is involved in an accident, you must submit proof of financial responsibility as well.

If you need to show proof of financial responsibility following an OWI suspension or revocation, you have the following options:

• Ask your insurance carrier to file Form SR-22 (Certificate of Automobile Liability Insurance) with the Office of Driver Services.

• File a surety bond, cash, or securities of $55,000.

• If you need to drive an employer's vehicle, your employer's insurance carrier can certify proof of financial responsibility by completing Form SR-23 (AAMVA Uniform Financial Responsibility Form) or Form SR22 if you're part of the owner's immediate family.

Iowa Liability Insurance Requirements for Private Passenger Vehicles

If you use a liability insurance policy to meet your financial responsibility requirements, minimum coverage amounts are:

• $20,000 for bodily injury liability for one person

• $40,000 for bodily injury liability for more than one person

• $15,000 for property damage liability

Keep in mind that liability insurance only provides protection for an accident in which you were at fault. It offers the bare minimum of insurance protection. If you wish to have additional protection against damages to your vehicle, you may want to look into purchasing collision, personal injury protection, comprehensive physical damage, or uninsured motorist policies. There may also be other types of coverage that you might be interested in. Shop around to make sure you're getting the best possible coverage at the lowest possible price.

Proof of Insurance and Financial Responsibility

When you purchase an auto insurance policy, the company providing the coverage will send you an insurance card. Keep this card in your vehicle at all times so you are ready to submit it to the appropriate authorities in the event of an accident.

If you don't have liability insurance and need to provide another form of proof of financial responsibility, call the Office of Driver Services at (800) 532-1121 for submission instructions.

Penalties for Failure to Maintain Financial Responsibility

If you can not submit the proof of insurance or other forms of financial responsibility as requested by the Financial & Safety Responsibility Act, you will lose your license and registration privileges. In the case of an auto accident, you can avoid penalties for failure to maintain financial responsibility only under the following circumstances:

• The accident happened often someone took your vehicle without your permission.

• The accident involved no property damage or personal injuries to parties other than yourself.

• Your car was legally parked, stopped, or standing at the time of the accident.

If you are required to show proof of insurance or other forms of financial responsibility because of a suspension or revocation for a conviction, unsatisfied judgment, or violation of the OWI law, this requirement will last for two years. If you are stopped by a law enforcement officer and found to have no proof of insurance or other acceptable forms of financial responsibility, your license and registration will be suspended.