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TheStreet Open House

Minimum Wage, Maximum Car Insurance Pain





If you earn the minimum wage, chances are you've bought the cheapest car insurance you could find.

Depending on where you live, just enough liability insurance to be legal can cost anywhere from $342 to $1,544. At $7.25 an hour, that is at least a week's pay -- and in some places, more than a month's pay.

Minimum-wage workers tend to be young. Half of them are under 25, according to the U.S. Department of Labor.  We priced basic state-minimum auto insurance quotes from coast to coast for a 24-year-old male with no tickets and good credit. We put him behind the wheel of a 1997 Ford Taurus worth perhaps $2,500.

Yet even this vehicle -- or any similar no-frills ride-- represents a huge expense for the 4 million or so Americans working a minimum-wage job.

In Springfield, Ill., he would have to work 55 hours at that state's $8.25  minimum wage to pay a year's worth of the state's minimum liability coverage on his beater car. In Denver, 97 hours.

And in Albany, N.Y., Trenton, N.J., or Hartford, Conn., he would have to work more than a month of minimum-wage hours to buy the lowest amount of car insurance required.

CarInsurance.com looked at bare-minimum policies for a young driver in each state's capital. Unless you're 24, male, a resident of the particular addresses we used and proud owner of a 1997 Taurus, your quotes probably won't match ours, which are only a snapshot of the rates available through our quote-comparison engine.

They are, however, a good indicator of the financial hurdle confronting any young driver who depends on his own car to commute to school or work.

What a 24-year-old pays for state-minimum liability

State State minimum Annual cost Minimum wage Hours
Alabama 25/50/25 $668 $7.25 92
Alaska* 50/100/25 N/A $7.75 NA
Arizona 15/30/10 $542 $7.80 69
Arkansas 25/50/25 $874 $6.25 140
California 15/30/5 $592 $8.00 74
Colorado 25/50/15 $756 $7.78 97
Connecticut 20/40/10 $1,388 $8.25 168
Delaware 15/30/10 $778 $7.25 107
District of Columbia 25/50/10 $1,422 $8.25 172
Florida 10/10 $582 $7.79 75
Georgia 25/50/25 $784 $5.15 152
Hawaii 20/40/10 $492 $7.25 68
Idaho 25/50/15 $568 $7.25 78
Illinois 20/40/15 $452 $8.25 55
Indiana 25/50/10 $428 $7.25 59
Iowa 20/40/15 $410 $7.25 57
Kansas 25/50/10 $518 $7.25 71
Kentucky 25/50/10 $890 $7.25 123
Louisiana 15/30/25 $976 $7.25 135
Maine 50/100/25 $622 $7.50 83
Maryland* 30/60/15 N/A $7.25 NA
Massachusetts* 20/40/5 N/A $8.00 NA
Michigan 20/40/10 $1,216 $7.40 164
Minnesota 30/60/10 $1,180 $6.15 191
Mississippi 25/50/25 $486 $7.25 67
Missouri 25/50/10 $480 $7.35 65
Montana 25/50/10 $526 $7.80 67
Nebraska 25/50/25 $602 $7.25 83
Nevada 15/30/10 $494 $8.25 60
New Hampshire+ None $466 $7.25 64
New Jersey 15/30/5 $1,230 $7.25 170
New Mexico 25/50/10 $544 $7.50 73
New York 25/50/10 $1,544 $7.25 213
North Carolina 30/60/25 $462 $7.25 64
North Dakota 25/50/25 $668 $7.25 92
Ohio 12.5/25/7.5 $470 $7.85 60
Oklahoma 25/50/25 $782 $7.25 108
Oregon 25/50/20 $994 $8.95 111
Pennsylvania 15/30/5 $532 $7.25 73
Rhode Island* 25/50/25 N/A $7.75 NA
South Carolina 25/50/25 $748 $7.25 103
South Dakota 25/50/25 $422 $7.25 58
Tennessee 25/50/15 $466 $7.25 64
Texas 30/60/25 $630 $7.25 87
Utah 25/65/15 $880 $7.25 121
Vermont 25/50/10 $512 $8.60 60
Virginia 25/50/20 $628 $7.25 87
Washington 25/50/10 $546 $9.19 59
West Virginia 20/40/10 $1,052 $7.25 145
Wisconsin 50/100/15 $342 $7.25 47
Wyoming 25/50/20 $422 $5.15 82

* Data missing or unavailable at time of publication

+ New Hampshire drivers must show proof of financial responsibility in the event of an accident

 No shortcuts: It's the law

The federal minimum wage is $7.25 an hour, though many states set their own higher and a few go as low as $5.15.

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