Maintaining a vehicle and insuring it isn’t cheap and can quickly push you over your budget. But automobiles are necessity to get to work or get around freely in most parts of the country. So, people often ask what is the least expensive car insurance you can buy and comply with minimum state requirements. You should always keep your personal circumstances in mind to make the best call on what you should buy. You will find out what is the cheapest auto insurance policy and more below so that you can make informed decision.
Along with budgetary constraints, the wish to buy the most affordable policy can stem from believing the minimum is all you need. In either case, you should look at all your options before settling with the lowest vehicle insurance coverage just because it is the lowest-priced. You may be surprised to see that you can find a great full coverage policy at a reasonable price. So, you shouldn’t be quick to buy a policy before you can answer fully what does auto insurance cover. Otherwise, you may be giving up valuable coverage without even knowing.
What Is the Cheapest Auto Insurance I Can Get?
Every state, except Delaware and Virginia require minimum auto insurance coverage. Delaware still requires you to prove financial responsibility and Virginia requires you to pay a $500 Uninsured Motorist Vehicle Fee if you opt out of insurance (a figure that could in fact get you minimum insurance in the state).
The answer to what is the minimum car insurance you need or must buy depends on which state you live in. Generally, liability coverage consists of three main covers with a fourth requirement in ‘no fault’ states. The three requirements in all states are generally written in the format of 25/50/25, where it equates:
- $25,000 coverage for a single injury in an auto accident
- $50,000 coverage for multiple injuries in an auto accident
- $25,000 coverage of property damage in an auto accident
These coverages are for third parties, either in your vehicle or another or pedestrians but do not include coverage for yourself or your own property. In a no fault state, which there are 12, the fourth requirement is Personal Injury Protection, which is a cover for your own and family members’ medical expenses.
These average costs of vehicle insurance for minimum coverage range from $284.03 per year in the cheapest state of North Dakota to $882.10 in the most expensive state of New Jersey, according to National Association of Insurance Commissioners (NAIC) latest report. However, NAIC is several years behind in publishing their findings and those figures are likely to be higher now. You could take this range as the absolute cheapest liability car insurance payment, however you would be putting yourself and your finances at risk.
Why You May Need More than the Minimum
The first risk is from uninsured and underinsured motorists. The national average for uninsured motorists is 12.6%, with a range between 3.9% in Massachusetts and 25.9% in Oklahoma. The average driver can expect 3 – 4 auto accidents in their lifetime and if you live in a high uninsured state, you can expect at least one of those accidents to involve an uninsured party. In an at fault system, this means you would have to recover the costs of the accident directly from the individual. If they do not have vehicle insurance, it stands to reason they also would not have the money to cover these expenses.
If you were to cause an accident in an at fault state and only had the minimum Liability coverage, with the average claims ranging between $15,000 to $40,000, without pain and suffering claims in a lawsuit; the minimum coverage often will not cover you fully. Any amount over your insurance coverage will be paid out of your own pocket. Do you have thousands of dollars in disposable income to cover these costs?
How Much Is The Cheapest Car Insurance
The natural follow up to the main question is how much does it cost to insure a car? Luckily, we have done extensive work on this topic on another post titled how much is car insurance where you can find out not only average cost of liability coverage but also you can check average cost of full coverage in your state and compare the two of them.
Liability policies are obviously the most economical to buy. The cheapest liability policies cost about $420 which is $35 per month if you are lucky enough to live in one of the states with the lowest auto insurance rates. However, drivers in states with expensive rates like Michigan pays on average $1,130 per annum for the cheapest vehicle insurance coverage and it is $94 a month.
On the other hand, lucky drivers can get full coverage for around $900 or $75 a month in several states with the cheapest automobile insurance rates. If your state is on the other end of the spectrum you would be facing average full coverage quotes as high as $2,700 or $225 a month. But that is on the extreme end. Average liability policy cost in the US is about $684 ($57 per month) and average full coverage auto insurance cost is $1,325 ($110).
The fact is that these figures may not mean much to you because the premium you need to pay can be a lot higher or lower. There are so many factors that affect car insurance rates and quite a few of them unique to you. It is good to know these average costs. But your best option is to do thorough automobile insurance comparison shopping online if you want to find out what is the most competitive automobile insurance for you.
Cost Difference Between Minimum & Full Coverage Car Insurance
The real difference in the question ‘what is the most affordable auto insurance I can buy?” and “what is the maximum I can afford?” is probably a lot less than you might think. Full coverage car insurance is the best way to protect your financial future, by ensuring you have insurance to cover when you injure others or damage their property and also to protect your own assets including the vehicle, property, medical payments and loss of wages.
The difference between the lowest Liability-only coverage and the average premium was just over $2 per day in the most expensive state of New Jersey. If you ensure you get the best discounts available as well as the lowest quotes you could potentially get a full coverage policy that fits within your budget and saves you from a future financial ruin.