Adding Auto Insurance to Florida’s Rising Cost of Living

Florida lawmakers are expected to return to Tallahassee soon for another special session to address the state property insurance crisis. But it’s not just homes and condos where Floridians pay high insurance costs, but also automobiles.

In fact, Florida auto insurance rates are among the best in the country.

An analysis by insure.com ranks Florida as the nation’s most expensive state for car insurance, with an average premium of $2,560 per year, or $213 per month. This is a 23% increase in fares compared to 2021.

Ohio was listed as the lowest, with average insurance premiums of just $1,023 per year, insure.com reported. The national average for full-coverage auto insurance is $1,682 in 2022.

Another study, Bankrate’s 2022 True Cost of Automobile Insurance Report, showed that the average annual premium for full-coverage auto insurance for a Floridian is $2,762, the second-highest rate in the world. country and behind Louisiana, at $2,864. Florida’s average is nearly $1,000 higher than the average US annual premium of $1,771.

Why are the numbers so high? There are myriad reasons, some native to Florida and others attributable to national trends that have affected the entire industry emerging from the pandemic.

A majority of state lawmakers believed they had addressed the issue to some degree in 2021, when they passed a bill (SB 54) co-sponsored by Tampa Bay Area state senses . Danny Burgess (R- Zephyrhills) and Darryl Rouson (D- St. Petersburg) who reportedly repealed the state’s ‘no-fault’ insurance law that requires motorists to have $10,000 in damage protection coverage Personal Injuries (PIP) to help pay their medical expenses after an accident.

It would have replaced PIP with mandatory bodily injury (BI) coverage of at least $25,000 per person and $50,000 per occurrence and would require insurers to offer medical payment coverage (although policyholders can remove from this coverage).

Governor DeSantis, however, vetoed the bill, saying the measure “does not adequately address the current issues facing Florida drivers” and could have unintended consequences that would be harmful to consumers and the market. car insurance.

It would certainly have increased car insurance rates, according to a report commissioned by the Office of Insurance Regulation that was released just before this veto. The Pinnacle Actuarial Resources study determined that if the “no-fault” clause were repealed, motorists would have seen their insurance premiums increase by 13%, or about $202 per vehicle per year. And the liability premium would increase by nearly 20% for motorists who purchased medical coverage with a $10,000 limit.

But there are those who believe motorists would have been better off had the law passed.

“When I see people moving to Florida from other states that have mandatory bodily injury liability, their premiums always seem to be lower,” says Brandon-based insurance agent Kevin Swanson, who says that he has not read enough studies to have a firm opinion on the matter.

Insurance companies were happy that DeSantis vetoed the bill, though they recognize PIP reform is needed.

“The PIP is riddled with fraud. That’s a problem,” says Michael Carlson, president and CEO of the Personal Insurance Federation of Florida (PIFF). “We have state law enforcement constantly working to eradicate it, to prosecute people who commit it.”

This fraud plays out in many ways, Carlson says, like an “entire cottage industry of bogus medical providers” sending fraudulent medical bills to car insurance companies. “They’ll charge for various types of soft tissue treatments…they’ll charge for it until they hit $10,000, and then all of a sudden that patient is fine, and they won’t charge anymore.”

There are also incidents with motorists who stage accidents, and Tampa and Miami are known to be among the top cities in the country where such fraud is prevalent.

In July, Chief Financial Officer Jimmy Patronis announced the arrest of Angela Ippolito Duncan, owner of Ybor Medical Center, for allegedly planning and participating in staged car crashes to submit more than $970,000 in bogus insurance claims. ‘car insurance. According to a press release from the Office of the Chief Financial Officer, the investigation revealed that Duncan recruited an undercover detective to assist in an intentional traffic accident, provided passengers with vehicles, and directed all participants for treatment at Ybor Medical Center. .

“The scammers work every day to jack up your insurance premiums to line their pockets,” Patronis said after the arrest.

Another factor driving up rates that hasn’t been addressed by state lawmakers is glass replacement fraud, which observers say has gone unchecked in years. This is where contractors will literally go after motorists in parking lots, gas stations, or knock on their front door to let them know they can have their windshield replaced at no cost if they have insurance coverage. comprehensive insurance, which about 90% of Florida drivers have, according to Mark Friedlander of the Insurance Information Institute.

What motorists don’t realize, however, is that once they signed the paperwork with these contractors to have their windshield replaced, they “assigned” a law firm to handle the issue with their insurance company. This assignment of benefits (AOB) with auto glass has led to an explosion of lawsuits in Florida over the past decade by more than 4,000%, according to a consortium of organizations calling themselves “Fix the Cracks” which want the state to tackle the problem. publish.

“This is an area of ​​law where these cases were virtually non-existent 10 years ago, and now they number in the thousands, and the only explanation is that there was either a huge meteor shower that came through the state of Florida, either the attorney fee incentives caused this and the loophole that was allowed to be created for auto glass claims still exists,” says William Large, President of Florida Justice. Reform Institute.

The Bankrate report also indicates that drivers in Florida spend the second highest proportion of their money on car insurance at 4.42% of their income, behind only Louisiana (5.26%). And of all the nation’s metropolitan areas analyzed, drivers in Miami and Tampa spend the highest percentage of their annual income on car insurance, at 5.58% and 4.49%, respectively. The average American motorist spends 2.57% of their annual income on car insurance.

Another factor that makes Florida auto insurance rates among the highest in the country is our frequent storms and floods, and the fact that we have a lot of auto accidents. And keep in mind that Florida has a very high percentage of people aged 65 and over, according to US Census data.

There were 3,737 deaths in car crashes last year, making Florida the third most dangerous state to drive in the country, according to the National Highway Traffic Safety Administration. There were over 400,000 car crashes in Florida in 2021, resulting in over 252,000 injuries in those crashes.

Additionally, one in five (20.4%) drivers in the state are uninsured, the sixth highest rate in the nation.

While problems in Florida contribute to our above-average premiums, national and global issues also play a role, such as inflation and a supply chain breakdown that has increased rates everywhere.

“You had inflation affecting new vehicles, the cost of used vehicles, the availability of spare parts and the cost of labor. So all of this means that when an insurance company has to fix you after an accident, they have a bigger payout. And if they have a larger payment, they now have to collect it somewhere,” says Michael Giusti, journalist and principal analyst for insurancequotes.com.

It’s unclear whether the Legislature is set to address any of these issues next year, but observers note that after the governor vetoed the PIP bill in 2021 , the appetite for auto insurance reform in Tallahassee has cooled considerably.

So, will the legislator try to reform car insurance in 2023?

“I don’t think so,” said Large. “I think the advocates who are proposing that a bill go from PIP to BI probably got a very clear message from Governor DeSantis vis-a-vis his veto, and I don’t think they’re going to try to evoke an invoice in 2023.”

But the future isn’t all bad news for Floridians hoping to save on their car insurance bills. Unlike property insurers, which are dissolving and abandoning Florida at an alarming rate, the auto insurance industry remains robust in Florida, with more than 50 companies writing policies for motorists.

“If you look at all the insurance products across the country, auto insurance is the most competitive,” says Friedlander. “Rates vary widely from company to company. And we always recommend that you (to) shop around for your coverage if your rates go up, because you can get multiple quotes and different discount programs that will help you.

Here is a list of car insurance rates by state and in Washington, DC in 2022, from an analysis by insure.com:

State Full coverage 2022 (year) Difference from the national average ($1,682 in 2022) in %
Florida $2,560 52%
Louisiana $2,546 51%
Delaware $2,137 27%
Michigan $2,133 27%
California $2,115 26%
Kentucky $2,105 25%
Missouri $2,104 25%
Nevada $2,023 20%
New York $2,020 20%
Nebraska $2,018 20%
Colorado $1,940 15%
New Jersey $1,901 13%
Caroline from the south $1,894 13%
Texas $1,875 11%
washington d.c. $1,858 ten%
Rhode Island $1,845 ten%
Oklahoma $1,797 seven%
Connecticut $1,750 4%
Wyoming $1,736 3%
Montana $1,692 1%
Georgia $1,647 -2%
Maryland $1,640 -2%
Arizona $1,617 -4%
West Virginia $1,610 -4%
Mississippi $1,606 -5%
Arkansas $1,597 -5%
Kansas $1,594 -5%
South Dakota $1,581 -6%
Illinois $1,578 -6%
Alabama $1,542 -8%
Massachusetts $1,538 -9%
New Mexico $1,505 -11%
Wisconsin $1,499 -11%
Minnesota $1,493 -11%
Utah $1,469 -13%
Pennsylvania $1,445 -14%
North Dakota $1,419 -16%
Tennessee $1,373 -18%
Washington $1,371 -18%
North Carolina $1,368 -19%
Alaska $1,359 -19%
Iowa $1,321 -21%
Virginia $1,321 -21%
New Hampshire $1,307 -22%
Hawaii $1,306 -22%
Indiana $1,256 -25%
Oregon $1,244 -26%
Vermont $1,158 -31%
Idaho $1,121 -33%
Maine $1,116 -34%
Ohio $1,023 -39%