By Mitch Perry, Florida Phoenix
Florida lawmakers are expected to return to Tallahassee soon for another special session to deal with the state’s property insurance crisis. But it’s not just homes and condos that Floridians pay high insurance costs for, it’s cars too.
In fact, Florida auto insurance rates are among the best in the nation.
Analysis by insure.com ranks Florida as the nation’s most expensive state for auto insurance, with an average premium of $2,560 per year, or $213 per month. That’s a 23% increase in rates from 2021.
Ohio was listed as the lowest, with average insurance premiums a mere $1,023 per year, insure.com reported. The national average for comprehensive motor vehicle insurance in 2022 is $1,682.
Another study, Bankrate’s “True Cost of Auto Insurance Report” in 2022, showed that a Floridian’s average annual collision damage waiver premium is $2,762, the second-highest rate in the country and behind only Louisiana at $2,864. Florida’s average is nearly $1,000 higher than the average annual premium in the United States of $1,771.
Why are the numbers so high? The reasons are myriad, some native to Florida and others stemming from national trends that have impacted the industry at large in the wake of the pandemic.
A majority of state legislators believed they had addressed the issue to some degree in 2021 when they passed a bill (SB 54) led by Tampa Bay state Senators Danny Burgess (R-Zephyrhills) and Darryl Rouson (D-) was carried along. St. Petersburg), which would have repealed the state’s “no-fault” insurance law, which requires motorists to carry $10,000 in Personal Injury Insurance (PIP) to pay for their post-accident medical expenses.
It would have replaced PIP with mandatory Personal Injury (BI) coverage of at least $25,000 per person and $50,000 per event, and required insurers to offer health insurance (although policyholders could opt out of that coverage).
However, Gov. DeSantis vetoed the bill, saying the measure “does not adequately address the current issues facing Florida drivers” and could have unintended consequences that would be bad for consumers and the auto insurance market.
According to a report commissioned by the Office of Insurance Regulation, released shortly before this veto, it would definitely have increased auto insurance rates. The Pinnacle Actuarial Resources study found that motorists would increase their insurance premiums by 13%, or about $202 per vehicle annually, if “no fault” were eliminated. And liability premiums would increase nearly 20% for motorists who purchased medical payment insurance with a $10,000 limit.
But some think motorists would have been better off had the law been passed.
“When I see people moving to Florida who are from other states that have mandatory personal injury liability insurance, their premiums always seem to be lower,” says Brandon-based insurance agent Kevin Swanson, who says he hasn’t read enough studies to have a firm opinion on the subject.
Insurance companies were happy that DeSantis vetoed the bill, although they recognize the need for PIP reform.
“PIP is full of scams. That’s a problem,” said Michael Carlson, president and CEO of the Personal Insurance Federation of Florida (PIFF). “We have state law enforcement agencies constantly working to eradicate it and prosecute those who commit it.”
Carlson says fraud plays out in a variety of ways, such as an “entire cottage industry of bogus medical providers” sending fraudulent medical bills to auto insurance companies. “They’re going to charge for different types of soft tissue treatments … they’re going to charge it until they get to $10,000 and then suddenly the patient is fine and they won’t charge anymore.”
There are also incidents of motorists staging accidents, and Tampa and Miami are known to be among the top cities in the country where such fraud is rampant.
In July, CFO Jimmy Patronis announced the arrest of Ybor Medical Center owner Angela Ippolito Duncan for allegedly planning and participating in staged auto accidents in order to file more than $970,000 in bogus auto accident insurance claims. According to a press release from the CFO’s office, the investigation found that Duncan recruited an undercover officer to take part in a premeditated motor vehicle accident, who provided passengers for the vehicles and directed all involved to Ybor Medical Center for treatment.
“Scammers work every day to jack up your insurance premiums to line their own pockets,” Patronis said after the arrest.
Another factor driving rates up that state lawmakers haven’t addressed is glass-substitute fraud, which observers say hasn’t been controlled for years. Here, contractors will literally follow drivers in parking lots, gas stations, or knock on their door to let them know they can have their windshields replaced for free if they have comprehensive insurance coverage, which about 90% of Florida drivers say Mark has Friedlander from the Insurance Information Institute.
What motorists don’t realize, however, is that once they sign the paperwork with these contractors to have their windshield replaced, they have “hired” a law firm to handle the issue with their insurance company. This attribution of benefits (AOB) with auto glass has led to a more than 4,000% explosion in lawsuits in Florida over the past decade, according to a consortium of organizations calling themselves “Fix the Cracks” who want the state to stop doing so concerns output.
“This is an area of law where these cases were virtually non-existent 10 years ago and now they are riddled by the thousands and the only explanation is that there was either a massive meteor shower that passed over the state of Florida or the incentives for Attorney’s fees are driving this, and the void that was allowed to be created for auto glass claims still exists,” said William Large, president of the Florida Justice Reform Institute.
The Bankrate report also finds that Florida drivers spend the second-highest percentage of their money on auto insurance at 4.42% of their income, behind only Louisiana (5.26%). And of any metro area in the country surveyed, drivers in Miami and Tampa spend the highest percentage of their annual income on their auto insurance, at 5.58% and 4.49%, respectively. The average American driver spends 2.57% of their annual income on auto insurance.
Another factor in Florida’s auto insurance rates being among the highest in the country is our frequent storms, floods and the fact that we have many auto accidents. And remember, according to US Census data, Florida has a very high percentage of seniors age 65 and older.
According to the National Highway Traffic Safety Administration, there were 3,737 fatalities from auto accidents last year, making Florida the third most dangerous state in the country. In 2021, there were more than 400,000 auto accidents in Florida, injuring more than 252,000 people.
Also, one in five drivers (20.4 percent) in the state is uninsured, the sixth highest rate in the country.
While the problems in Florida contribute to our above-average premiums, there are also national and global problems at play, such as inflation and the supply chain collapse, which have pushed up interest rates everywhere.
“They had inflation that affected new vehicles, the cost of used vehicles, the availability of parts and the cost of labor. So all of this means that if an insurance company has to make you equal after an accident, they will get a larger payout. And if they have a bigger payout, now they have to recoup it somewhere,” says Michael Giusti, a senior reporter and analyst for Insurancequotes.com.
Whether the Legislature is ready to address any of these issues over the next year is uncertain, but observers are noting that after the governor’s veto of the PIP bill in 2021, appetite for auto insurance reform in Tallahassee has diminished significantly.
So will lawmakers attempt auto insurance reform in 2023?
“I don’t think so,” says Large. “I think the proponents moving for a bill to move from PIP to BI probably got a very clear message from Gov. DeSantis regarding his veto, and I don’t think they’ll try to put forward one.” bill in 2023.”
But the future isn’t all bad news for Floridians hoping to save on their auto insurance bills. Unlike property insurers, which are breaking up and leaving Florida at an alarming rate, Florida’s auto insurance industry remains resilient, with more than 50 companies writing policies for motorists.
“If you look at all insurance products across the country, auto insurance is the most competitive,” says Friedlander. “Tariffs vary significantly between companies. And we always recommend that you buy your coverage when your rates go up, as you can get multiple offers and different discount programs that will help you.”
Here is a list of auto insurance rates by state and Washington, DC in 2022 from analysis by insure.com:
State 2022 Full Coverage (Year) % Difference from National Average ($1,682 in 2022)
- 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%
- South Carolina $1,894 13%
- Texas $1,875 11%
- Washington DC $1,858 10%
- Rhodes $1,845 10%
- Oklahoma $1,797 7%
- Connecticut $1,750 4%
- Wyoming $1,736 3%
- Montana $1,692 1%
- Georgia $1,647 -2%
- Maryland $1,640 -2%
- Arizona $1,617 -4%
- Western 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%
- $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%
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