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American drivers pay about $2,646 annually for auto insurance, but most people don't need to pay that much to drive legally. State minimum car insurance only costs about $764 per year, on average, and in some places, it's possible to score an even better rate. Here's a look at some of the companies that offer the best minimum coverage car insurance.
Geico car insurance is widely available and it's often among the most affordable options out there. Drivers who choose Geico for their state minimum coverage pay about $441 per year on average. Those who qualify for some of Geico's auto insurance discounts may be able to save even more.
It's a great option for those looking to bundle home and auto. It also offers plenty of optional car insurance protections for drivers who decide they want a little more protection.
State Farm consistently scores well in customer satisfaction surveys, including J.D. Power's annual U.S. Auto Insurance Study. It also has a nationwide network of agents to help drivers figure out the kind of coverage they need and process claims.
Its prices aren't too shabby either, with the average cost of minimum car insurance coming in around $671 per year. Unfortunately, State Farm doesn't offer many discounts to bring this average down. But those willing to prove their good driving habits could save with its Drive Safe & Save program.
Progressive charges about $684 per year for minimum car insurance, which is still pretty reasonable. And drivers in states with lower average rates may be able to score an even better deal.
The same goes for customers who qualify for some of Progressive's many discounts. The company offers a plethora of ways for drivers to save and it's very transparent about how much each discount will lower rates. Many of the discounts are pretty easy to achieve and will apply to a broad base of drivers.
Farmers doesn't offer the most affordable minimum car insurance; in our analysis, its average rate was $749 per year. But drivers who are a member of one of Farmers' affinity groups may be able to score a much lower price.
It partners with businesses and associations to offer discounted rates on its car insurance to members. Drivers who fall into one of these groups could receive a much more competitive rate on minimum car insurance.
USAA is widely considered one of the best car insurance providers out there for drivers seeking full and minimum coverage. However, it's only available to military members, veterans, and select family members.
Drivers who qualify should definitely give it a closer look, especially since its average minimum car insurance cost is just $428 per year. That's the cheapest rate of any company we surveyed.
Minimum car insurance varies by state, but in most states, it includes the following:
In some states, minimum car insurance coverage also includes:
Every state sets its own laws about how much car insurance you need. A pretty common requirement is $25,000 of bodily injury liability coverage per person, $50,000 of bodily injury liability coverage per accident, and $25,000 of property damage liability coverage. This is sometimes written as 25/50/25 coverage.
But there are states that require more or less than this. California, for example, only requires drivers to have 15/30/5 coverage, while Alaska requires 50/100/25 coverage.
Drivers typically pay more for minimum car insurance in states that require higher coverage limits and in states that require uninsured and underinsured coverage in addition to the liability coverage discussed above.
Minimum car insurance coverage is synonymous with cheap auto insurance. Rather than paying thousands of dollars a year for car insurance, most drivers can drive legally for just a few hundred dollars annually.
That makes minimum coverage especially popular with those on a budget or with an accident history who have seen their rates increase.
While state minimum car insurance coverage may save drivers money on their premiums, it can cost them big time if they cause an accident.
Car accident costs can rapidly exceed state minimum coverage, especially if someone is seriously hurt. Drivers who have state minimum coverage may not have enough insurance to pay the full cost of the damages. They could find themselves in court being sued for the remainder.
State minimum car insurance also doesn't include any protection for the driver's own vehicle. So if that's damaged as well, the driver must pay out of their own pocket. These extra protections raise insurance premiums, but by how much depends on the type of vehicle. Drivers who own cars with the lowest insurance costs may not notice too much of a difference.
|Offer||Best For||Next Steps|
|Great For: Best for affordability|
|Great For: Best for customer service|
|Great For: Best for discounts|
|Great For: Best for affinity group members|
|Great For: Best for military members and their families|
All drivers must have state minimum car insurance coverage to legally drive on the roads. But it's often better for policyholders to buy higher liability limits and extra protection for their vehicle to ensure they don't owe thousands of dollars in the event of an accident.
Most lenders require that drivers carry collision and comprehensive coverage in addition to state minimum coverage. These extra protections ensure that the lender can recoup their investment if the car is damaged in an accident.
Our Insurance Expert
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