What If My Insurance Claim Exceeds the Available Insurance Policy Limits?

Last Updated: 9/28/2023

We get this question frequently from clients because in Iowa the minimum insurance coverage is only $20,000 for personal injuries and the law has not been updated since 1983.  Yes, it has been more than 30 years since the amount has been increased as set forth in Iowa Code Section 321A.1(11).  Many people are under the impression that in an insurance claim if the negligent person or driver has insurance that they will be covered.  The cold hard truth is that the insurance company is only legally required to pay up to the amount of limits of the policy that was purchased.  Therefore, if the negligent party only purchased the state minimum of $20,000 per person for personal injury, then that is all their insurance company will pay regardless of whether your claim exceeds the policy limits.

What Have We Done to Try to Fix This Problem?

On several occasions attorney, Corey J. L. Walker wrote proposed legislation to increase the amount to at least $50,000 and then have it readjusted for inflation every 5 years.  He also testified in subcommittee meetings at the Iowa State Capitol before legislators.  Unfortunately, the request to increase insurance coverage policy limits has fallen on deaf ears.  The insurance industry in Iowa is very strong and they take the position that if you increase the minimum insurance requirements, you will have a significant number of people who will not pay the higher insurance premium that will be required, resulting in more uninsured drivers and less insurance company profits.  Under Iowa law, every driver has to have insurance coverage.  Insurance premiums are based upon a person's driving record, credit score and the amount of insurance coverage purchased.  Regardless of what may happen, we think the legislature should raise the state minimums, especially given that the cost of medical care has quadrupled since 1983.  ($5,000 worth of medical care in 1983 now costs $22,180.77).  Medical bills pile up fast and even one trip to the emergency room with follow-up care can be expensive. 

What Can You Do? 

The best thing that you can do is to purchase as much UIM/UM (underinsured and uninsured motorist coverage) that you can afford before you are involved in a car accident here in Iowa.  This is the only insurance coverage you can purchase that protects you against drivers who have either not enough or no insurance at all.  We offer a book at no cost which explains what this coverage does for you in more detail and even gives you the research that we found concerning how you can increase your coverage for only pennies per day.  We offer the book at no cost because we have had to tell too many clients that the other driver did not have enough insurance and neither did they, which resulted in them losing lots of money.  Request your copy by clicking here or on the book image.

Is There Anything Else? Possibly.  If the person who injured you in a car accident has assets, it is possible to file suit, obtain a judgment and then collect against those assets.  However, keep in mind that Iowa law provides exemptions for a person's home, a car up to a set value, etc.  We have seen very few situations when a person with minimal insurance coverage has assets to collect upon.  Also, the person that hurt you could file for bankruptcy, which may wipe-out most, if not all, of the judgment you obtained.