Thanks to the internet it is now possible - quite easy in fact - to find several cheap auto insurance companies in virtually every state. While almost every state requires each of its drivers to buy it, each state also allows a cheap form of auto insurance to be sold to any driver who wants it. The cheapest insurance that will legally allow you to drive in your state is a very basic, minimum liability policy.

Each state sets its own minimum amount of liability insurance that its drivers must purchase. Check with a local auto insurance agent or with your state's department of insurance to find out what the minimum amounts are in your state.

What you will be given is a string of 3 numbers something like 10/20/10. [Remember, 10/20/10 is just an example; your state may require more basic liability insurance than this]. So what does a 10/20/10 policy cover?

The first "10" stands for the maximum medical payment ($10,000) that the insurance will make for any one individual involved in an accident. This is regardless of how badly this individual is hurt or what the actual medical bills are.

The "20" stands for the maximum medical payments ($20,000) that the insurance will make for everyone involved in the accident, regardless of how many people are involved, the extent of their injuries, or what the actual total of all the medical bills is.

The final "10" in our example refers to the maximum amount the insurance will pay for property damage claims associated with an accident. Property damage includes, but is not limited to, the repair or replacement of the other person's vehicle.

A basic limited liability policy does not pay even one cent for the repair or replacement of your vehicle, nor does it pay anything toward your medical bills or the medical bills of anyone in your vehicle at the time of an accident.

Also, you need to be aware that should the medical bills or property damage suffered by the other party in an accident exceed the rather limited amount of the basic liability policy, you could be required to make up any difference out of your own pocket. This could result in the loss of any savings you have and it could result in the forced sale of your home in order to make good the debt.

Where can you find these cheap auto insurance companies? The best place is to simply look online. You'll find dozens of websites devoted to providing you with comparison price quotes from several different insurance companies, allowing you to pick and choose the best rate that you can find.

Just be aware that no one website compares the prices from every insurance company in your state. If you really want to be certain that you are getting the best rate possible from the cheapest company there is, then take the extra few minutes to make your price comparisons on 3 different websites, rather than relying on just one.

But once you've made all of your price comparisons and you've settled on the cheapest auto insurance you can find, you can feel good knowing that you are saving the most money possible, every single month.