There are many variables involved in the calculation of auto insurance cost, even when you are looking for the absolute cheapest auto insurance.
Depending on where you live and what the state requirements are for minimum coverage, you could spend anywhere from $15 to $50 per month on auto insurance. Read on to learn exactly what coverage this will net you and the consequences of different levels of coverage.
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Buying the Cheapest Auto Insurance
To get the absolute cheapest auto insurance cost, you need to purchase only the bare minimum auto insurance policy. Every state has different minimum requirements, so the state you live in will determine how much coverage you need. All states require proof of financial responsibility when it comes to driving a car, and most of them enforce this with auto insurance requirements for liability coverage.
Liability is used to pay for body or property damages inflicted on another person due to an accident caused by you. If you only buy liability insurance, you will have no insurance for your own car or medical injuries resulting from a car accident for which you are found at fault.
Many people who own an old car or a car of little value choose to forgo comprehensive and collision coverage and purchase just liability because they are comfortable risking the financial loss of their own cars. People who have health insurance usually do not buy a medical policy on their auto insurance since their private health insurance typically covers doctor and hospital bills.
The Cheapest States to Insure your Car
Since each state has different liability requirements, your cheapest auto insurance rates for just liability will vary from state to state. The cheapest liability states overall are Florida, Louisiana, and Oklahoma, with 10/20/10 set for the basic minimum liability coverage required. The first number is the maximum payout, in thousands, for coverage for bodily injury and death for a single person, the second number is the total payout for all persons combined for bodily injury and death, and the third number is the maximum property damage payout amount. Property damage includes cars, fences, houses, or any other physical property that is damaged as a result of the accident.
As you can see from the low amounts of 10/20/10, carrying just the minimum coverage in these states still leaves you at great financial risk. While you legally meet the state requirements, if you are at fault for an accident in these states chances are your insurance coverage will not be enough to cover the true costs of the damage, leaving you responsible for the difference.
The states that come in next cheapest are California, Delaware, New Jersey, and Pennsylvania, with liability requirements of 15/30/5. While their bodily injury and death coverage limits are higher, their property requirements are lower. This means that if you are at fault for an accident where someone gets injured, more of those medical bills will be covered with the insurance set forth by these states. However, less money will be allocated to property damage, which means if there is any damage to the other person’s car (in these states, in excess of $5,000), you will be personally responsible for the balance. So try not to hit a Mercedes or Porsche!
If you see this stopping in front of you at a red light then DO NOT HIT IT! 
Uninsured Motorists Coverage
Due to low coverage requirements by the states, underinsured motorist coverage is sold by insurance companies so drivers can buy extra protection just in case they are struck by someone who has only the minimum state requirements. That is what is meant by underinsured motorist coverage. It does not mean a person didn’t buy enough coverage to pass state law, it means that the person only bought enough coverage to satisfy state law but not enough coverage to pay for the claim.
The Most Expensive States for Auto Insurance
When considering what states have the lowest requirements for auto insurance, it helps to compare the states with the highest requirements as well. Alaska and Maine are the two states with the absolute highest liability requirements, set with a minimum coverage of 50/100/25. This is almost twice the coverage required by the average amount that is set by most states. Most states mandate liability insurance for approximately 25/50/15 or 20/40/10, so residents of Alaska and Maine have higher insurance rates almost automatically just because they are required to carry more insurance.
Personal Factors & Auto Insurance Costs
Auto insurance rates also vary neighborhood by neighborhood. Even if you buy the absolute cheapest auto insurance and just have minimum liability in the lowest requirement state, if you live in a high risk area for crime or spend more hours driving than the average person, your rates will be higher.
Your age, driving record, and even your gender, marital status, and credit report can impact the cost of your auto insurance.
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