State guide · Midwest
Iowa subrogation law guide
A claimant whose fault is greater than the combined fault of the defendants, third-party defendants and released persons is barred, so 51% or more defeats the claim. At 50% or less, damages are reduced by the claimant's share.
Iowa at a glanceIA
- Property damage
- 5 years
- Bodily injury
- 2 years
- Fault rule
- Modified, 51% bar
- Gov. notice
- 730 days
Overview
Iowa is one of the more favorable Midwest states for property subrogation. Damage to property carries a 5-year limitation period under Iowa Code § 614.1(4), written contracts run 10 years, and the Iowa Supreme Court in Neubauer v. Hostetter refused to treat tenants as implied co-insureds under a landlord's fire policy, which keeps negligent-tenant fire claims open. Fault is modified comparative with a 51% bar under § 668.3, and the comparison includes third-party defendants and released persons. Joint and several liability is narrow: under § 668.4 only a defendant found 50% or more at fault is jointly liable, and only for economic damages, which covers carrier-paid property loss. Iowa's full recovery rule protects insureds, but Ludwig measures being made whole against the damage elements the policy covered, so itemized settlements matter. Section 668.5 limits a subrogee to the part of a judgment tied to the losses it paid and makes it share legal expenses pro rata. Claims against cities, counties and school districts need no pre-suit notice since 2007; suit must simply be filed within 2 years. Claims against the State require a written claim within 2 years. Bodily injury claims also run 2 years under § 614.1(2).
Quick reference with citations
- Property damage SOL
- 5 years
- Iowa Code § 614.1(4) (injuries to property)
- Bodily injury SOL
- 2 years
- Iowa Code § 614.1(2)
- Product liability
- 2 years for personal injury (Iowa Code § 614.1(2)) and 5 years for property damage (§ 614.1(4)); a 15-year statute of repose runs from first purchase, lease or installation unless an express warranty runs longer (§ 614.1(2A)).
- Written contract
- 10 years
- Contract and indemnity recoveries
- Comparative fault rule
- Modified, 51% bar
- Iowa Code § 668.3(1)(b)
- Government notice of claim
- 730 days
- Municipalities (cities, counties, school districts and other political subdivisions): no pre-suit notice since 2007, but suit must be commenced within 2 years after the loss or injury (Iowa Code § 670.5). State of Iowa: a written claim must be filed with the director of the Department of Management within 2 years after accrual before suit under the State Tort Claims Act (Iowa Code § 669.13).
Fault rule in practice
How Iowa's rule changes a $50,000 recovery.
A claimant whose fault is greater than the combined fault of the defendants, third-party defendants and released persons is barred, so 51% or more defeats the claim. At 50% or less, damages are reduced by the claimant's share.
Authority: Iowa Code § 668.3(1)(b)
| Insured's share of fault | Recoverable in IA | Under pure comparative |
|---|---|---|
| 0% | $50,000 | $50,000 |
| 20% | $40,000 | $40,000 |
| 50% | $25,000 | $25,000 |
| 60% | Barred | $20,000 |
Doctrines that move the number
Iowa doctrine checklist.
Made-whole doctrine
Iowa follows a full recovery (made-whole) rule: an insurer's subrogation or reimbursement claim is not effective until the insured has been fully compensated (Brandon v. West Bend Mut. Ins. Co., 681 N.W.2d 633 (Iowa 2004)). Under Ludwig v. Farm Bureau Mut. Ins. Co., 393 N.W.2d 143 (Iowa 1986), being made whole is measured against the elements of damage the policy covered, so allocated recoveries for those elements are reachable even if other damages went uncompensated.
Economic loss doctrine
Iowa bars negligence recovery of purely economic loss absent physical injury to persons or other property (Annett Holdings, Inc. v. Kum & Go, L.C., 801 N.W.2d 499 (Iowa 2011); Nebraska Innkeepers, Inc. v. Pittsburgh-Des Moines Corp., 345 N.W.2d 124 (Iowa 1984)). Sudden physical damage to other property, the core of most fire and water subrogation, remains recoverable in tort.
Joint and several liability
Iowa Code § 668.4 removes joint and several liability for any defendant found less than 50% at fault. A defendant at 50% or more is jointly and severally liable for economic damages only, which includes property damage paid by a carrier.
Anti-subrogation and waiver
Iowa rejects the implied co-insured theory for tenants: absent a lease provision to the contrary, a landlord's fire insurer may subrogate against a negligent tenant (Neubauer v. Hostetter, 485 N.W.2d 87 (Iowa 1992)). A carrier cannot subrogate against its own insured, and express lease or construction contract waivers still control.
Practice notes
Working Iowa subrogation files.
- 1
Iowa dropped its municipal notice requirement in 2007, so claims against cities, counties and school districts under chapter 670 need only be filed within 2 years of the loss (§ 670.5). Claims against the State work differently: a written claim must go to the director of the Department of Management within 2 years (§ 669.13) before suit. When a state highway crew or a city utility is involved, confirm which entity owns the asset before choosing the path.
- 2
Fault math with the 50% joint liability line: a fictional Cedar Rapids machine shop fire produces $300,000 in paid property loss. The jury assigns 10% to the insured, 55% to an HVAC contractor and 35% to a heater manufacturer. Recoverable damages are $270,000. The contractor, at 55%, is jointly liable for the full $270,000 of these economic damages, while the manufacturer, under 50%, owes only its own $105,000 share.
- 3
Iowa's full recovery rule protects the insured, but Ludwig measures being made whole against the elements of damage the policy covered. Where a settlement allocates specific amounts to property damage or medical expense, the carrier can reach those amounts even if pain and suffering went uncompensated. Push for an itemized settlement allocation in writing; where none exists, Iowa courts may need a separate hearing to allocate the recovery among damage elements.
- 4
Landlord fire files are worth opening in Iowa: under Neubauer v. Hostetter, a landlord's carrier may subrogate against a negligent tenant unless the lease says otherwise, so pull the lease for waiver or insurance-for-benefit clauses first. On auto physical damage, Iowa claims settlement rules require the carrier to include the insured's deductible in subrogation demands on request and to share recoveries with the insured on a proportionate basis.
- 5
Under Iowa Code § 668.5, a subrogee recovers only the part of a judgment attributable to the losses it paid and bears a pro rata share of legal and administrative expenses. Ishqkala models Iowa recovery yield net of that expense share, applies a 1,825-day property alert and a 730-day injury alert, and flags state-entity files for the § 669.13 written claim.
Key cases
Ludwig v. Farm Bureau Mut. Ins. Co.
393 N.W.2d 143 (Iowa 1986)
Allowed the insurer to recover from settlement amounts allocated to the damage elements it had paid, even though the insured was not compensated for pain and suffering; the leading Iowa statement of how the full recovery rule is measured.
Neubauer v. Hostetter
485 N.W.2d 87 (Iowa 1992)
Rejected the rule that a tenant is an implied co-insured under the landlord's fire policy, leaving the landlord's insurer free to subrogate against a negligent tenant absent a contrary lease term.
Annett Holdings, Inc. v. Kum & Go, L.C.
801 N.W.2d 499 (Iowa 2011)
Reaffirmed that Iowa's economic loss rule bars negligence claims for purely economic loss without physical injury to persons or other property.
Inter-company arbitration
Iowa auto physical damage disputes between signatory carriers run through Arbitration Forums, Inc., with compulsory jurisdiction up to $100,000 in total company-paid damages; the deductible is excluded from that limit. Because Iowa allocates fault among all parties, including released persons, expect responding companies to argue an unnamed party's negligence. Under AF rules, a recovering company that lets such a case be heard waives the balance against the unnamed party, so add every responsible signatory before the hearing or withdraw and pursue the rest outside arbitration.
How Ishqkala applies this guide
IA rules, built into every score.
- Opportunities with a Iowa loss state are calendared against the 5 years property damage period or the 2 years bodily injury period, whichever controls the claim type.
- The insured's estimated fault share is applied under modified, 51% bar before recoverable dollars are scored.
- Files involving a public entity get a 730-day notice deadline that outranks the general SOL in the priority queue.
- Alerts fire at 180, 90, 45 and 15 days before the controlling deadline.
Other modified, 51% bar jurisdictions
FAQ
Iowa subrogation FAQ
5 years (Iowa Code § 614.1(4) (injuries to property)). A subrogating carrier generally takes the insured's claim subject to the same limitation period, usually measured from the date of loss.
Modified, 51% bar (Iowa Code § 668.3(1)(b)). A claimant whose fault is greater than the combined fault of the defendants, third-party defendants and released persons is barred, so 51% or more defeats the claim. At 50% or less, damages are reduced by the claimant's share.
Municipalities (cities, counties, school districts and other political subdivisions): no pre-suit notice since 2007, but suit must be commenced within 2 years after the loss or injury (Iowa Code § 670.5). State of Iowa: a written claim must be filed with the director of the Department of Management within 2 years after accrual before suit under the State Tort Claims Act (Iowa Code § 669.13).
Iowa follows a full recovery (made-whole) rule: an insurer's subrogation or reimbursement claim is not effective until the insured has been fully compensated (Brandon v. West Bend Mut. Ins. Co., 681 N.W.2d 633 (Iowa 2004)). Under Ludwig v. Farm Bureau Mut. Ins. Co., 393 N.W.2d 143 (Iowa 1986), being made whole is measured against the elements of damage the policy covered, so allocated recoveries for those elements are reachable even if other damages went uncompensated.
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