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Florida Auto Insurance Premiums Remain Second Highest In Nation

Over the past few years, Florida’s issues with auto insurance have been well-documented. Legislators have consistently tried to fight to keep the cost of premiums down and recently repealed the state’s no-fault insurance system. However, it appears that doing so caused little relief for Florida drivers. A new study revealed that Florida continues to be one of the least-affordable states for automobile insurance.

Statistics From The Insurance Research Council

In the middle of December, the Insurance Council released the results of their nationwide study on automobile insurance. When conducting its research, the IRC found that Florida was the second least-affordable state for automobile insurance in the United States, second only to Louisiana.

The IRC compiled these statistics by coming up with an affordability index, which weighs the average cost of auto insurance to the median household income in the state. The affordability index for Florida drivers was 2.44 percent, which is nearly an entire percentage point higher than the nationwide average of 1.59 percent.

How Does The No-Fault System Factor Into The Study?

The affordability index took information from 2011 to 2015. It’s easy for critics to make the case that the high cost of insurance can be attributed directly to the state’s no-fault insurance system. However, IRC senior vice president Elizabeth Sprinkel clarified that the high insurance costs were representative of broader systemic issues.

Sprinkel said in a press release, “The affordability of auto insurance in Florida continues to be a concern, despite efforts to reform the no-fault system. Since 2012, we’ve seen very little long-term improvement in PIP costs and increases costs in the system.”

Furthermore, the IRC reported that there were 1.89 personal injury protection claims per 100 insured vehicles in the state of Florida. This is nearly 50 percent higher than the nationwide average. Evidence from the study also suggested that the verbal no-fault threshold did not reduce the total of tort liability claims that were filed.

Factors Causing High Insurance Premiums

The IRC mentioned that a few key elements were driving high insurance costs. These costs tend to represent the widespread problems representative of the no-fault system. It could take years for changes to take place. Some of the factors include the:

• “High frequency of auto injury claims
• Cost of litigation and attorney involvement
• Rates at which drivers used medical utilization

It will be interesting to see if the Florida legislature aims to tackle high insurance costs in the early 2019 legislative session, now that they have begun weeding out the no-fault policy. The IRC report indicates there is still work to be done to help ease the burden on Florida drivers.

In the meantime, if you are suffering from high auto insurance costs, we recommend talking with your agent. Your agent could review your policy and determine which areas are causing your premiums to spike. Don’t hesitate to shop around with other insurance carriers to find a better rate.

Michael J. Babboni's wide-ranging legal career is based on the strong belief that everyone should be treated fairly and have access to effective legal help. Michael began putting his beliefs in action by helping the people of St. Petersburg Florida get what they are owed in civil trials fighting to protect families by making corporations pay, and honor their obligations.

Florida Auto Insurance Premiums Remain Second Highest In Nation

Goldman Babboni Fernandez
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