Garage liability insurance and dealer bonds
Garage liability insurance
Dealer financial liability minimums
- Bodily injury / person
- $100,000
- Bodily injury / accident
- $300,000
- Property damage
- $50,000
Iowa DOT requires the dealership to maintain these limits along with its dealer bond.
Insurance requirementsDealer bond
$75,000
Bond face amount. The premium you pay is priced separately.
Add a bond quote to your dealer insurance application.
Bond requirementsIn Iowa, insurance and licensing requirements depend on your dealer category. Independent used-auto, wholesale, broker, RV, motorcycle, truck and boat businesses can have different requirements. Confirm your license category with Iowa Department of Transportation.
Insurance and proof of coverage
Dealer financial liability minimums: $100,000 bodily injury per person, $300,000 bodily injury per accident and $50,000 property damage.
Iowa DOT requires the dealership to maintain these limits along with its dealer bond.
UM, UIM and medical coverage
BI means bodily injury. PD means property damage. For example, 25/50 BI means $25,000 per person and $50,000 per accident.
- Uninsured motorist (UM)
- 20/40 BI unless rejected in writing
- Underinsured motorist (UIM)
- 20/40 BI unless rejected in writing
- PIP / first-party medical
- Not required
Iowa auto liability policies include UM and UIM at the financial-responsibility bodily injury minimum of $20,000 per person/$40,000 per accident unless the named insured signs a rejection. The dealer licensing liability requirement is higher.
Confirm filing format with Iowa DOT; the licensing page states the dealership must maintain the coverage.
Your lease, lender or exposure to a serious accident may call for higher limits. Garage liability does not automatically insure the value of inventory or customers’ vehicles.
The dealer bond is a separate requirement
A $75,000 dealer surety bond is required for the ordinary used motor vehicle dealer category.
The bond amount is its face amount, not the price you pay. A surety prices the bond separately, and you may have to reimburse it for claims it pays. A dealer bond does not replace garage liability or inventory insurance. You can add a bond quote to the dealer insurance application.
State licensing fees
Check the linked licensing agency for the current application, renewal and plate fees.
These state fees are separate from insurance and bond premiums. Other licensing and startup expenses may apply. Confirm the payable amount in the current state application or portal.
A practical filing detail
New used-dealer applicants generally need an eight-hour pre-licensing course, zoning confirmation and a location inspection. Restricted license categories have different permissions, including restrictions on dealer plates.
What does dealer insurance cost in Iowa?
Iowa’s dealer liability requirement is higher than the state’s ordinary driver minimum. For dealers carrying open-lot coverage, inventory values, outdoor storage and wind/hail terms are also part of the comparison. Prior insurance and driver records can change the result.
Real quotes issued by our agency, Pro Risk Solutions dba dealership.insure. Your price depends on your dealership and coverage.
| Dealer example | Annual premium | Down payment | Monthly payments | Coverage |
|---|---|---|---|---|
| Iowa Established dealer Without inventory coverage | $1,897 | $601 | 9 payments of $163 | $350,000 garage liability per accident. Inventory coverage not included. |
| Iowa Startup dealer Without inventory coverage | $2,410 | — | — | $350,000 garage liability per accident. Inventory coverage not included. |
Iowa $1,897 example: coverage and business details
2 years in business · 1 employee, excluding owners · 4 dealer plates · $350,000 garage liability per accident.
Inventory coverage not included.
$1,000 liability deductible.
State requirements and official sources
Quoted October 8, 2026.
Iowa $2,410 example: coverage and business details
New business · 5 dealer plates · $350,000 garage liability per accident.
Inventory coverage not included.
Scheduled drivers only; the owner is not an authorized inventory driver.
$1,000 liability deductible.
State requirements and official sources
Quoted October 1, 2026.
Iowa dealer insurance costs and coverage comparison · What affects your insurance premium
Get your dealer insurance quote
Complete the dealer insurance application online. You can add a dealer bond quote in the same application.
Keep reading
Sources & resources
- Iowa DOT: Get a Motor Vehicle Dealer's License
- Iowa Code §516A.1: UM/UIM and written rejection
- Iowa Insurance Division: vehicle liability minimums
Policy wording controls actual coverage.