What Is the Cheapest Auto Insurance Coverage?

The cheapest car insurance you can buy is Liability only coverage, which complies with state minimum requirements and allows people to drive legally. When people don’t need to insure their own automobile and/or financially just are able to spare money for the lowest possible coverage, they can go with this option. If motorists can spare some more money but still want to spend as low as possible for the coverage they like, they need to shop hard to find the most competitive insurer to achieve this goal.

Along with budgetary constraints, the wish to buy the cheapest auto insurance policy can stem from believing that is all needed. Motorists should look at all options before settling for something inferior just because of its price. It is likely that they can find a great package with Collision and Comprehensive included at a reasonable price. Otherwise, they may be giving up on valuable protection too easily.

The Cheapest Policy Option

The state you live in determines the minimum vehicle insurance requirements and affects the rates. It is compulsory to comply with these rules in every state, except New Hampshire and Virginia. New Hampshire still requires you to prove financial responsibility and Virginia requires you to pay a $500 Uninsured Motorist Vehicle Fee (a figure that could in fact get you basic coverage there, providing you are not high risk).

Generally, liability car insurance consists of three main coverage with a fourth requirement in ‘no fault’ states. The three requirements in all are generally written in the format of 25/50/25, where it equates:

  • $25,000 for a single injury
  • $50,000 for multiple injuries
  • $25,000 for property damage

These provisions are for third parties, either in your vehicle or another or pedestrians but do not include yourself, your family or your own property. In a no fault state, of which there are 12, the fourth requirement is Personal Injury Protection, which is for your own and family members’ medical expenses regardless of who was at fault.

Also, twenty states and D.C. require Uninsured motorists coverage as part of the minimum coverage mandated.

The average premium for minimum coverage auto insurance range from $223 per year in the cheapest state of Iowa to $1,371 in the most expensive state New York. And the national average is $622. Clear premium difference between states even for the cheapest vehicle insurance you can buy highlights how much where you live affects your premiums. Knowing the average costs helps in determining if you are paying a fair premium or it is time to shop around.

You May Need More than the Minimum

The first risk is from 12.6% uninsured motorists nationally, with a range between 3.9% in Massachusetts and 25.9% in Oklahoma. A typical driver can expect 3 – 4 auto accidents in a lifetime and there is a high chance at least one of those accidents will be caused by an uninsured driver. In an at fault system, this means you would have to recover the costs of the accident directly from the individual, which could prove to be costly and time consuming.

If they have no policy in force, it stands to reason they also would not have the money to compensate for these expenses you suffered. Now, you can arrange Uninsured Motorist Coverage (UMC) so that your own carrier pays for them. It is worth noting that UMC limits can only go up to the limits of your liability coverage. In other words, you cannot increase the limits that protect you without increasing the safety net you provide to third parties.

If you were to cause an accident in an at fault state and had auto insurance with the minimum Liability limits, with the average claims ranging between $15,000 to $40,000, without pain and suffering claims in a lawsuit; the minimum often will not compensate claims against you fully. Any amount over limits will need to be paid out of pocket. Most people don’t have thousands of dollars in readily available savings to meet these costs.

Average Costs for the Cheapest and Full Coverage

State required minimum Liability only car insurance policies are obviously the cheapest to buy and cost $622 a year on average in the US, which is $52 per month, although it can be much less or more depending on the state you call home. For example, you only pay $225 in Maine but you have to pay $1,128 in Florida, on average.

On the other hand, lucky drivers can get full coverage for as low as $941 a year on average or $78 a month in jurisdictions with the lowest automobile insurance rates. The average cost of a full coverage policy in the US is $2014.

There are so many factors affecting costs and quite a few of them are unique to you so the premium you need to pay can be a lot more or less. It is good to know these median figures but the best option is to do a thorough car insurance comparison shopping if you want to find out what is the most competitive quote for you.

You should always get quotes for a level of protection you are comfortable with even if you want to get the lowest priced automobile insurance policy because you are concerned about its affordability. The premium gap can be narrow between liability only and full coverage at a few locations in the country. However, the protections afforded by a full coverage policy are pretty distinguishable since it provides Collision and Comprehensive coverage for your own vehicle as well as providing a better level of liability coverage.

If you ensure you get the most discounts available as well as the most competitive vehicle insurance quotes, you could potentially get a full coverage policy that fits within your budget and saves you from a future financial hardship in case your car gets damaged as a result of an insurable peril.

You should always keep personal circumstances in mind to make the best call. An older person living somewhere in the quiet, not going anywhere far and has a clunker of a car may not be worried much about these things. However, you may stand to lose a lot more if you are going places with a nice car, house and decent income to safeguard.