Final answer:
Low cost auto insurance has minimum liability limits, often the lowest being a combination such as 15/30/5. These limits reflect the maximum payment for injuries per person, per accident, and for property damage. The correct minimum limits required depend on the state's insurance regulations.
Step-by-step explanation:
Low cost auto insurance requires the insured to carry certain minimum liability limits to cover damages for which the insured is responsible in the event of an accident. These limits are typically expressed in a format like 15/30/5 or 100/300/100, where the first number represents the maximum payment for bodily injury per person, the second number is the maximum payment for bodily injury per accident, and the third number is the maximum payment for property damage per accident.
In the question provided, the limits 5/30/15, 10/20/30, 15/30/5, and 100/300/100 are different options for minimum liability coverage. The correct answer typically depends on the state's requirements where the policy is issued, as each state has its own minimum insurance requirements. Generally, the lowest cost option among these would be the one with the lowest limits, assuming all other factors are the same.
Using the simplified example, if the total damage incurred by car accidents in a group of 100 drivers is $186,000 and each driver carries low cost auto insurance, those with low-risk incidents, such as door dings, are essentially subsidizing the cost for those with high-risk incidents, such as large accidents.