What is the Cheapest Car Insurance You Can Get?
Last Updated on November 6, 2020
If you want to legally drive a car on a public road in the United States, then you’re required to have car insurance.
Every state in America requires you to have some type of car insurance in order to legally drive. If you don’t have car insurance, then you can’t drive. It’s that simple.
Of course, there are different levels of insurance coverage. Some drivers choose to have the bare minimum level of insurance legally required by their state. Other drivers choose maximum coverage for maximum peace of mind.
What’s the cheapest car insurance you can get? Today, we’re explaining the bare minimum insurance you’re legally required to have to operate a vehicle on America’s roads.
The Lowest Legal Insurance Coverage
Every state except New Hampshire requires you to have a minimum amount of liability coverage. States don’t usually require you to cover damage to your own vehicle or property. Instead, they require you to have liability coverage – which means you cover damage to other drivers on the road – including anyone you might injure.
That’s how liability coverage works. It helps pay for any damage you cause to another driver, their passengers, or any property – including the other driver’s vehicle.
Car insurance liability coverage varies from state to state. Some states – like Florida – require just $10,000 in coverage. Other states require as much as $50,000 or $100,000 in coverage.
There are three components to car insurance liability coverage. Each component has a different limit:
- Bodily injury coverage per person
- Bodily injury coverage per accident
- Property damage coverage per accident
The cheapest car insurance you can get is the one that meets your state’s minimum legal requirements for each category.
In California, for example, you’re required to have $15,000 of bodily injury coverage per person, $30,000 of bodily liability coverage per accident, and $5,000 in property damage liability coverage per accident.
In New York, you’re required to have $25,000 of bodily injury coverage per person, $50,000 of bodily injury liability coverage per accident, and $10,000 of property damage liability coverage per accident.
Certain states have additional minimum legal insurance requirements. North Carolina drivers, for example, are required to have $30,000 of bodily injury liability per person, $60,000 of bodily injury liability per accident, and $25,000 of property damage liability per accident in addition to $30,000 of uninsured motorist coverage per person, $60,000 in uninsured motorist coverage per accident, and $25,000 in uninsured motorist property damage coverage per accident.
New York, meanwhile, is the only state where the cheapest legal car insurance requires a certain amount of liability for death. Drivers are required to have $50,000 liability for death per person and $100,000 in liability coverage for death per accident.
Some states allow you to purchase what is called a “broad form” auto insurance policy. Unlike the name implies, broad form policies do not offer you a broad range of coverage. These policies offer basic, bare-bones coverage (usually at a low price) and will only cover one driver at the minimum state liability limits. Broad form policies are suitable for those who are the only operators of their vehicles and are comfortable driving with just the minimum coverage limits. Broad form policies aren’t sold everywhere, so first check with your insurance agent to see if it’s available where you live.
NerdWallet has a great writeup explaining the minimum insurance requirements in each state, including the lowest legal amount of bodily injury liability per person, bodily injury liability per accident, and property damage liability per accident in each state, as well as any additional requirements on the cheapest car insurance.
How to Compare the Cheapest Car Insurance Quotes
Up above, we mentioned that car insurance plans are required to have three minimum levels of coverage, including minimum levels for bodily injury coverage per person, bodily injury coverage per accident, and property damage coverage per accident.
When you’re comparing car insurance quotes, you’ll see numbers like:
100/300/50
This means you have $100,000 of bodily injury coverage per person, $300,000 of bodily injury coverage per accident, and $50,000 of property damage coverage per accident. The numbers above would be considered close to “full coverage”.
A bare minimum car insurance plan would look like 15/30/10 in most states.
Other Legal Requirements When Comparing the Cheapest Car Insurance
States have different requirements beyond bodily injury coverage and property damage coverage. Some of the other requirements you’ll encounter include:
Personal Injury Protection: 15 states require personal injury protection, or PIP, which covers medical expenses for the insured individual and their passengers in an accident – regardless of which driver is at fault. PIP is typically required in “no-fault” states where each party is responsible for his or her own damages in an accident.
Medical Payments Coverage: Medical payments coverage is similar to PIP in that both go towards your medical expenses if you’re injured in an accident. Medical payments coverage specifically covers medical expenses – it does not cover lost wages (PIP does cover lost wages).
Uninsured and Underinsured Motorist Coverage: Approximately half of all states require uninsured or underinsured (UM/UIM) motorist coverage. These policies protect you if you’re injured by a driver who has no car insurance – or a driver with inadequate car insurance.
You Should Consider Carrying More than the Cheapest Car Insurance
Carrying the legal minimum car insurance is generally a bad idea. Why? Well, let’s say you collide with a van carrying 6 passengers. Theoretically, your bare minimum insurance covers $15,000 per passenger. However, your insurance is also limited to $30,000 per accident. Even with minor injuries, you can quickly blow past your $30,000 coverage and end up paying for other damages out of pocket.
That’s why many high net worth individuals (i.e. those with lots of assets to seize) will have a full coverage policy and umbrella insurance.
Regardless of what you decide, you’ll find plenty of insurance companies in your state willing to offer you the cheapest car insurance you can get.
