Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 29, 2020

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It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Here's what you need to know...

  • Basic car insurance is the minimum car insurance to legally register and operate a vehicle in the United States
  • The minimum amount of insurance required will vary according to the state that you live in
  • Some amount of liability insurance to is always necessary to protect drivers from lawsuits should they cause damage in an accident

Basic car insurance meets the minimum car insurance requirements for your state. Purchasing only basic car insurance will help you to meet your legal obligations and is a cheap car insurance option, but you may find that it isn’t enough if you’re in a major accident.

Taking your chances and driving without insurance could not only cause you trouble with the law but could lead to serious financial trouble should you cause an accident.

Purchasing basic car insurance is better than taking your chances and driving an uninsured vehicle. Still, if you can afford to do so, you may want to consider an insurance policy with additional coverage.

Why should you shop around for car insurance? Each company will charge different rates for coverage. In order to get the best coverage at the cheapest price, you need to compare quotes.  Thankfully, we have made that easy for you.

Read on to learn the pros and cons of basic car insurance coverage and find out just how much is basic car insurance coverage. We can also help you find affordable basic car insurance or shop for full coverage instead.

Compare rates for the cheapest basic car insurance rates now by simply entering your ZIP code into our FREE car insurance quote tool on this page.

Table of Contents

Basic Car Insurance vs. Full Coverage Car Insurance

What is the most basic car insurance? Most states require a driver to carry some sort of minimum liability car insurance. Liability car insurance covers the property damage and bodily injury caused by you to someone else. It does not cover your car or passengers.

What is car insurance that offers full coverage? Full coverage is a combination of liability, collision, and comprehensive coverages. Collision covers damages to your property and passengers if you cause an accident. Comprehensive covers damages to your car not caused by an accident, such as a flood, theft, or vandalism.

Some drivers can barely afford the minimum coverage on their older cars and others want to make sure their new car can be replaced if needed. Each driver has to determine what fits his or her needs.

Read on to learn the pros and cons, including the case against purchasing basic car insurance coverage and find out which one is right for you.

What are the pros of basic car insurance?

So what are the benefits of car insurance that just meets the minimums?

For those struggling financially just to meet the state legal requirements for car insurance, there are some pros to purchasing simply basic car insurance that meets state regulations.

  • The more coverage and types of insurance you add to your policy, the more you will pay in terms of your annual rates
  • You could protect yourself from a costly lawsuit in the event you cause an accident by carrying basic car insurance
  • If your car is worth very little, purchasing only basic car insurance may be the most financially smart decision for you
  • Carrying the minimum coverage will allow you to drive legally without the threat of costly tickets or a suspended license

Put simply, basic coverage works best for drivers who are on a tight budget or who are looking for the best type of auto insurance for an older car while not spending much and are not overly concerned about repairing or replacing it in the event of an accident or other damage.

Let’s look at the average annual liability rates listed by the state. The numbers will give you an idea of the average cost of basic coverage. Use the search box to look for your state.

Average Annual Liability Car Insurance Rates By State
StatesAverage Annual Liability Rates
North Dakota$282.55
South Dakota$289.04
Iowa$293.34
Wyoming$323.38
Maine$333.92
Idaho$337.17
Vermont$340.98
Kansas$342.33
Nebraska$349.07
North Carolina$357.59
Wisconsin$359.84
Indiana$372.44
Alabama$372.57
Ohio$376.16
Arkansas$381.14
Montana$387.77
New Hampshire$393.24
Tennessee$397.73
Missouri$399.41
Virginia$413.12
Illinois$430.54
Mississippi$437.38
Minnesota$439.58
Oklahoma$441.57
Hawaii$458.49
New Mexico$462.21
California$462.95
Utah$471.26
Colorado$477.10
Arizona$488.59
Georgia$490.64
Pennsylvania$495.02
South Carolina$497.50
Texas$498.44
West Virginia$501.44
Countrywide $516.39
Kentucky $518.91
Alaska$547.34
Oregon$553.43
Washington$568.92
Massachusetts$587.75
Maryland$599.48
District of Columbia$628.09
Connecticut$633.95
Nevada$647.07
Rhode Island$720.06
Michigan$722.04
Louisiana$727.15
Delaware$776.50
New York$784.98
Florida $845.05
New Jersey$865.55
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Some states are significantly more expensive than others, but this type of coverage is the least expensive option.

This video gives you more information about basic car insurance.

Basic insurance will keep you legally driving but won’t cover anything not mandated by law.

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What are the cons of basic car insurance?

Despite its meeting the state minimum legal requirements, there are several reasons why you should purchase more than the basic car insurance if you are financially able to do so.

  • Basic car insurance will not cover damages to your car or the replacement cost if your car is totaled. This could add up to a lot of money out-of-pocket for you, especially if your car is worth a lot of money
  • Basic car insurance will not cover bodily injury to yourself or passengers if you are at-fault in an accident. Costly medical bills could have to be paid out of pocket
  • Even if you do not cause the accident you will not be protected if you are hit by an uninsured motorist.  According to the Insurance Information Institute, 13 percent of motorists are uninsured. You may have to pay for your own repairs or a new vehicle despite the fact you were not at fault
  • You will not be covered with basic car insurance in the event of a loss by means other than an accident, including theft, damage due to a falling tree, fire damage, or flood damage
  • If you do not own your car yet and continue to make payments to a bank for a car loan, you most likely will be required to carry collision coverage above the basic coverage

Many states’ minimum requirements are very low and would only cover costs in a minor accident. If you were in a major accident or had a hail storm come through, you would not be covered. You would have to pay for the repairs or replacement of your vehicle out of pocket.

Full coverage insurance is a great option. This table shows you the average annual rates for full coverage by the state. Search for your state in the box below.

Average Annual Full Coverage Rates by State
StateAverage Annual Full
Coverage Rates
Alabama$817.95
Alaska$1,048.60
Arizona$932.10
Arkansas$869.37
California$926.79
Colorado$898.79
Connecticut$1,108.67
Countrywide$954.99
Delaware$1,186.33
District of Columbia$1,307.62
Florida$1,206.46
Georgia$964.70
Hawaii$856.33
Idaho$656.95
Illinois$833.44
Indiana$724.65
Iowa$672.01
Kansas$819.14
Kentucky$904.39
Louisiana$1,326.78
Maine$679.56
Maryland$1,077.97
Massachusetts$1,075.35
Michigan$1,252.27
Minnesota$826.64
Mississippi$935.08
Missouri$825.40
Montana$842.54
Nebraska$778.81
Nevada$1,057.63
New Hampshire$777.98
New Jersey$1,353.96
New Mexico$896.58
New York$1,300.09
North Carolina$745.17
North Dakota$737.63
Ohio$741.11
Oklahoma$941.34
Oregon$855.57
Pennsylvania$934.34
Rhode Island$1,219.29
South Carolina$910.51
South Dakota$717.73
Tennessee$823.74
Texas$1,025.64
Utah$832.24
Vermont$737.67
Virginia$807.71
Washington$923.16
West Virginia$1,015.57
Wisconsin$696.11
Wyoming$816.71
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Keep in mind that full coverage includes liability, collision, and comprehensive coverages.

This video gives you more information on what is covered under full coverage.

Though full coverage is more expensive, the peace of mind that comes with it is priceless.

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Other Factors to Consider

There are many factors to consider when deciding on your car insurance coverage. Other than price, you have to meet minimum requirements and determine what coverage you need. Keep reading to learn more.

What are the state insurance requirements?

Whether or not you agree individuals should be required to carry auto insurance, it is a fact of life. Most states require some level of Bodily Injury Liability and Property Damage Liability. Some states also require Personal Injury Protection.

State requirements for car insurance are listed as 10/30/10:

  • $10,000 bodily injury protection for each person injured
  • $30,000 bodily injury protection for each accident
  • $10,000 towards property damage

If you do not carry at least the minimum car insurance required, you will be breaking the law.

Each state has stiff penalties for those who choose to drive uninsured, including fines, license suspension, and possible jail time.

What are some additional types of car insurance?

There are several common types of car insurance you can opt to include in your policy. The Insurance Information Institute describes the standard types of insurance and extras you can choose to purchase.

These types include:

  • Property Damage Liability – Covers damage to other vehicles should you cause an accident
  • Bodily Injury Liability – covers injuries sustained by individuals involved in an accident for which you were at fault
  • Personal Injury Protection (PIP) – Covers any injuries you and your passengers sustain due to an accident
  • Collision Coverage – Covers damages to your vehicle if you are at-fault in an accident
  • Comprehensive Coverage – Protects your vehicle from damages or loss due to events other than an accident such as theft or storms
  • Uninsured Motorist Protection – Protects you in the event you are involved in an accident caused by a driver without proper insurance

Full coverage insurance will provide these additional coverages. There are other coverages you can add based on your needs also.

Some extra coverages are:

  • Roadside Assistance – helps if your car breaks down or runs out of gas on the side of the road
  • Mechanical Breakdown – covers issues like transmission or brake repairs
  • Rental Car – pays for a rental car in certain situations, such as when your car is damaged from an accident
  • GAP – covers the difference in what you owe on a car and what it is worth if totaled in an accident
  • Custom Car – covers items like a custom paint job or added features

There are many add-ons to consider when purchasing car insurance. Speak with your agent about your situation and see what is available for you.

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How do you find the best option for you?

Prior to purchasing car insurance, you need to do your research and determine the best option for you. There are some basic car insurance companies that promise the best rates, but if you shop around you may get more coverage for less.

If finances are very tight and you drive an older vehicle with low replacement value, then basic car insurance may be an option for you.

You may want to consider a higher liability amount than your state’s minimum or you could face extra expenses if you are involved in an accident.

In most cases, the best option is to purchase a more comprehensive policy that will cover you, your passengers, your vehicle, and protect your assets if you cause an auto accident with other drivers involved.

Carrying the proper amount of insurance while taking advantage of available discounts could save you a lot of money in the long run.

It’s faster buying car insurance online vs an agent and often easier to get more quotes to compare.

You can start getting multiple basic car insurance quotes as well as full coverage quotes to compare today. Buy basic car insurance at a great rate now. Start by entering your ZIP code into our quote tool.

Frequently Asked Questions

Keep scrolling for the answers to some commonly asked questions about insurance in general.

#1 – What are the cons of health insurance?

Health insurance is generally a good idea, but there are times that the cons of buying the insurance outweigh the pros.

Some cons are:

  • The insurance can be expensive
  • Deductibles and copays can be high
  • A healthy person may pay less for occasional doctor visits than for the insurance itself

There are many times when carrying health insurance makes sense, such as when starting a family or if you have poor health.

#2 – What are the pros and cons of homeowner’s insurance?

As with all insurance, there are pros and cons of homeowner’s insurance. Owning a home is expensive and having insurance can help with major issues. A policy can cover major damage, accidents that may happen, and replace or repair items.

The downside is that it is another monthly payment, can have a high deductible, and not all damages, like flooding, are covered without adding on extras.

#3 – What are some pros and cons of life insurance?

Carrying life insurance can be beneficial as it will give you peace of mind that you will leave loved ones financially stable. The downside is that is can be expensive and difficult to understand. Also, depending on the policy, it can be difficult to get covered if you are in poor health or if your health declines.

#4 – What are some phone insurance pros and cons?

Cell phones are very expensive, but we have them with us all the time leading to more accidents with them. Cell phone insurance will cover issues like a cracked screen of breakage from being dropped but won’t cover losing a phone or having it stolen.

Another con is that the insurance itself can be pricey. It might be worth buying the insurance if you have a new phone but it doesn’t make sense if your phone is older.