The Great Insurance Divide: Iowa Vs. Michigan Auto Policies Explored

Iowa and Michigan are two states with very different auto insurance rates. Michigan has some of the highest car insurance rates in the country, with drivers paying an average of $154 a month for minimum coverage. On the other hand, Iowa has some of the cheapest car insurance rates in the US, with an average monthly rate of just $37 for minimum coverage.

Iowa's minimum insurance requirements

• $20,000 for bodily injury liability per person
• $40,000 for bodily injury liability per accident
• $15,000 for property damage liability per accident

These requirements are in place to ensure that motorists can cover the costs of damages or injuries they may cause in an accident. This financial responsibility is critical to protecting both the at-fault driver and other parties involved, as it ensures that victims receive compensation without the need for costly litigation.

While Iowa does not mandate collision or comprehensive coverage, lenders often require borrowers to maintain both when financing or leasing a vehicle. This protects their investment and ensures the vehicle's value is maintained. As such, vehicle owners with a loan or lease agreement are typically the ones who need to secure collision or comprehensive insurance in Iowa.

Iowa also does not require uninsured/underinsured motorist coverage or personal injury protection (PIP). However, these coverages can provide valuable protection in the event that you are hit by a driver with no or insufficient insurance.

The cost of minimum coverage car insurance in Iowa can vary depending on age and other factors, but it typically ranges from $14 to $105 per month. The cheapest companies for minimum coverage in Iowa are Progressive and West Bend Mutual, with average annual rates of $171 and $189, respectively.

Iowa's average insurance costs

Average Annual Costs:

The average annual cost of car insurance in Iowa is around $1,321, with a monthly cost of about $110. The cheapest car insurance company in Iowa is Nationwide, with an average annual rate of $881. The statewide average rate for car insurance is $1,215 per year, and the cheapest option is State Farm, with an average annual rate of $780. The average cost of full coverage car insurance in Iowa is $1,775 per year, while the minimum coverage costs around $324 per year.

Average Costs by Age:

Age plays a significant role in determining insurance costs. In Iowa, the average annual rate for young drivers is $1,994, while for seniors, it is $1,196. The average cost for a 35-year-old married woman is around $1,160, while for a 35-year-old married man, it is $1,173. The rates decrease with age, with a 60-year-old married woman paying an average of $1,003 per year and a 60-year-old married man paying $1,031.

Average Costs by Gender:

Gender also influences insurance rates. In Iowa, the average annual cost for female young drivers is $1,898, while for male young drivers, it is $2,090. For senior drivers, the average cost for a female is $1,175, and for a male, it is $1,217.

Average Costs by Driving Record:

A clean driving record can result in lower insurance rates. In Iowa, a single speeding ticket can increase the average annual rate to $1,493. An accident on record can further increase the rate to $1,673. A DUI conviction will result in an even higher rate, with an average annual cost of $2,056.

Average Costs by Credit Score:

Credit score also impacts insurance costs. In Iowa, drivers with excellent credit can expect to pay 16% less for full coverage compared to those with good credit.

Average Costs by Location:

Insurance costs can vary by city in Iowa. For example, drivers in Des Moines, the state's capital, pay on average $1,784 per year for full coverage, slightly higher than the state average.

Average Costs by Vehicle Type:

The type of vehicle insured also affects the cost. The Hyundai Venue SE has the lowest average annual insurance premium at $1,016, while the Maserati Quattroporte has the highest at $4,830.

Iowa's cheapest insurance companies

For a 20-year-old driver, the cheapest full-coverage car insurance in Iowa is Hastings Mutual at $1,768 per year, or about $147 per month. The cheapest minimum coverage car insurance in Iowa for 20-year-olds is Geico at $441 per year, or about $37 per month.

For a 30-year-old driver, the cheapest full-coverage car insurance in Iowa is Hastings Mutual at $766 per year, or about $64 per month. The cheapest minimum coverage car insurance in Iowa for 30-year-olds is Hastings Mutual at $194 per year, or about $16 per month.

For a 40-year-old driver, the cheapest full-coverage car insurance in Iowa is Hastings Mutual at $674 per year, or about $56 per month. The cheapest minimum coverage car insurance in Iowa for 40-year-olds is Hastings Mutual at $170 per year, or about $14 per month.

For a 50-year-old driver, the cheapest full-coverage car insurance in Iowa is Hastings Mutual at $620 per year, or about $52 per month. The cheapest minimum coverage car insurance in Iowa for 50-year-olds is Hastings Mutual at $156 per year, or about $13 per month.

For a 60-year-old driver, the cheapest full-coverage car insurance in Iowa is Hastings Mutual at $652 per year, or about $54 per month. The cheapest minimum coverage car insurance in Iowa for 60-year-olds is Hastings Mutual at $162 per year, or about $14 per month.

For a 70-year-old driver, the cheapest full-coverage car insurance in Iowa is Hastings Mutual at $814 per year, or about $68 per month. The cheapest minimum coverage car insurance in Iowa for 70-year-olds is Farm Bureau Financial Services at $184 per year, or about $15 per month.

Overall, State Farm has Iowa's cheapest average car insurance rates at $65/month. The average auto insurance premium in Iowa is $102/month.

Iowa's best insurance companies

Iowa's insurance rates are significantly lower than the national average, with drivers in the state paying $1,767 for full coverage and $324 for minimum coverage annually. In comparison, the national average cost of car insurance is $2,311 per year for full coverage and $640 per year for minimum coverage.

For car insurance, the best companies in Iowa are:

• Geico: Best for discounts
• State Farm: Best for low average rates
• Progressive: Best for digital policy management
• Auto-Owners: Best for personalized service
• Nationwide: Best for robust coverage options

For young drivers, State Farm and West Bend Mutual offer the cheapest rates. For drivers with poor credit, West Bend Mutual is the most affordable option.

Iowa's insurance laws

While these are the minimum required car insurance limits in Iowa, it is recommended to have higher coverage amounts to better protect oneself financially. Additionally, drivers in Iowa are not required to provide proof of liability insurance when registering their car, but they should have it in place before operating the vehicle on the road. Failure to provide valid proof of insurance when asked by law enforcement can result in license suspension or fines.

In terms of optional coverage, Iowa drivers may want to consider uninsured motorist bodily injury (UMBI) and underinsured motorist bodily injury (UIMBI) coverage. UMBI allows drivers to make claims with their own insurer in the event of a hit-and-run or if the other driver is uninsured. UIMBI, on the other hand, covers the balance of medical needs if the at-fault driver's bodily injury coverage is insufficient. These coverages are automatically included in new insurance quotes but can be rejected in writing.

Iowa also offers alternative proof of financial responsibility options for those who decide against purchasing an insurance policy. These options include a bond insurance card, where a surety company or individuals with Iowa real estate will serve as backup to pay for any judgments against the driver, and a security insurance card, where the driver deposits $55,000 with an Iowa bank and provides proof of no unpaid claims from previous accidents.

When it comes to the cost of car insurance in Iowa, the average cost of a liability-only auto insurance policy from Progressive was $77.31 per month in 2023, although rates can vary based on factors such as coverage selections, driving history, and ZIP code. The cheapest car insurance company in Iowa is Hastings Mutual, with an average annual rate of $742 for full coverage.

Frequently asked questions