Add auto insurance to the increasing costs of living in Florida

Florida lawmakers are scheduled to return to Tallahassee quickly for an additional particular session to take care of the state’s property insurance coverage disaster. Nevertheless it’s not simply houses and condos the place Floridians pay excessive insurance coverage prices, however vehicles as effectively.

In actual fact, Florida’s auto insurance coverage charges are among the many prime within the nation.

An evaluation from insure.com ranks Florida as the costliest state within the nation for auto insurance coverage, with the common premium at $2,560 a 12 months, or $213 a month. That’s a 23% improve in charges from 2021.

Ohio was listed because the lowest, with common insurance coverage premiums of simply $1,023 yearly, insure.com reported. The typical nationwide for full protection automobile insurance coverage is $1,682 in 2022.

One other research, Bankrate’s True Price of Auto Insurance coverage Report in 2022, confirmed that the common annual full protection automobile insurance coverage premium for a Floridian is $2,762, the second highest price within the nation and trailing solely Louisiana, at $2,864. Florida’s common is sort of $1,000 above the common annual premium in the US of $1,771.

Why are the numbers so excessive? There are myriad causes, some indigenous to Florida and a few attributable to nationwide traits which have affected the trade total popping out of the pandemic.

A majority of state lawmakers believed that that they had addressed the difficulty to some extent in 2021, once they handed a invoice (SB 54) co-sponsored by Tampa Bay space state Sens. Danny Burgess (R- Zephyrhills) and Darryl Rouson (D-St. Petersburg) that may have repealed the state’s “no fault” insurance coverage regulation that requires that motorists carry $10,000 in personal-injury safety (PIP) protection to assist pay their medical prices after accidents.

It could have changed PIP with obligatory bodily damage (BI) protection of at the very least $25,000 per particular person and $50,000 per prevalence and required insurers to supply medical funds protection (although coverage holders might choose out of that protection).

Gov. DeSantis vetoed the invoice nonetheless, saying that the measure did “not adequately tackle the present points going through Florida drivers” and will have unintended penalties that may be dangerous for customers and the automobile insurance coverage market.

It undoubtedly would have raised automobile insurance coverage charges, in keeping with a report commissioned by the Workplace of Insurance coverage Regulation that was revealed proper earlier than that veto. The research from Pinnacle Actuarial Sources decided that if “no fault” was repealed, motorists would have seen their insurance coverage premiums improve by 13%, or roughly $202 per automobile yearly. And the legal responsibility premium would go up practically 20% for motorists who bought medical fee protection with a $10,000 restrict.

However there are those that suppose motorists would have been higher off if the laws had handed.

“Once I see individuals transfer to Florida who come from different states which have obligatory bodily damage legal responsibility, their premiums all the time appear to be decrease,” says Brandon-based insurance coverage agent Kevin Swanson, who says he hasn’t learn sufficient research to have a agency opinion on the difficulty.

Insurance coverage firms had been completely happy that DeSantis vetoed the invoice, although they do acknowledge that PIP reform is required.

“PIP is riddled with fraud. It’s a drawback,” says Michael Carlson, President and CEO of the Private Insurance coverage Federation of Florida (PIFF). “Now we have state regulation enforcement continuously working to root it out, to prosecute these people who commit it.”

That fraud performs itself by in a number of methods, Carlson says, reminiscent of a “entire cottage trade of phony medical suppliers” that ship fraudulent medical payments to auto insurance coverage firms.  “They’ll cost soft-tissue therapies of varied varieties…they’ll cost it till they hit $10,000 after which immediately that affected person is okay, and so they gained’t cost anymore.” 

There are additionally incidents with motorists staging accidents, and Tampa and Miami are referred to as being among the many prime cities within the nation the place such fraud is prevalent.

In July, CFO Jimmy Patronis introduced the arrest of Angela Ippolito Duncan, proprietor of the Ybor Medical Middle, for allegedly planning and taking part in staged automobile accidents to submit greater than $970,000 in pretend accident car insurance coverage claims. In response to a press launch from the CFO’s workplace, the investigation revealed that Duncan recruited an undercover detective to take part in an intentional motorcar visitors crash, supplied the passengers for the automobiles, and directed all of the individuals for therapy on the Ybor Medical Middle.

“Rip-off artists are working each day to drive up your insurance coverage charges to line their very own pockets,” Patronis mentioned after the arrest was made.

One other think about driving up charges that hasn’t been addressed by state lawmakers is glass alternative fraud, which observers say has gone unchecked for years. That is the place contractors actually will go after motorists in parking tons, fuel stations or knock on their entrance doorways to tell that they will have their windshields changed for no value if they’ve complete insurance coverage protection, which about 90% of Florida drivers have, in keeping with Mark Friedlander with the Insurance coverage Info Institute.

What motorists don’t understand, nonetheless, is that when they signal the paperwork with these contractors to get their windshield changed, they’ve “assigned” a regulation agency to deal with the difficulty with their insurance coverage firm. That project of advantages (AOB) with auto glass has led to an explosion of lawsuits filed in Florida over the previous decade by greater than 4,000%, in keeping with a consortium of organizations calling themselves “Repair the Cracks” who need the state to deal with the difficulty.

“That is an space of regulation the place these instances had been just about nonexistent 10 years in the past, and now they’ve perforated into the hundreds, and the one rationalization is that there was both an enormous meteorite bathe that went over the state of Florida, or the inducement for legal professional’s charges are driving this and the loophole that was allowed to be created for auto glass claims continues to be in existence,” says William Massive, the president of the Florida Justice Reform Institute.

The Bankrate report additionally states that Florida drivers spend the second highest proportion of their cash on automobile insurance coverage at 4.42% of their revenue, trailing solely Louisiana (5.26%). And of all of the metro areas within the nation analyzed, Miami and Tampa drivers spend the very best share of their annual revenue on their automobile insurance coverage protection, at 5.58% and 4.49%, respectively. The typical American motorist spends 2.57% of their annual revenue on auto insurance coverage.

One other think about Florida’s auto insurance coverage charges being among the many highest within the nation are our frequent storms and flooding, and the truth that we now have a number of auto accidents. And needless to say Florida has a really excessive share of seniors 65 and older, in keeping with U.S. Census knowledge.

There had been 3,737 fatalities from automobile crashes final 12 months, making Florida the third most harmful state to drive within the nation, in keeping with the Nationwide Freeway Visitors Security Administration.  There have been greater than 400,000 car crashes in Florida in 2021, leading to greater than 252,000 accidents from these crashes.

Additionally, one out of each 5 drivers (20.4 %) within the state is uninsured, the sixth highest price within the nation.

Whereas the problems in Florida contribute to our higher-than-average premiums, nationwide and international points play a component as effectively, reminiscent of inflation and the breakdown within the provide chain that has raised charges in every single place.

“You had inflation affecting new automobiles, the price of used automobiles, the supply of spare elements and the price of labor. So all of which means when an insurance coverage firm has to make you proper after a crash, they’ve a much bigger payout. And if they’ve a much bigger payout, now they need to recuperate that someplace,” says Michael Giusti, a senior reporter and analyst for insurancequotes.com.

Whether or not the Legislature is poised to take up any of those points subsequent 12 months isn’t sure, however observers word that after the governor vetoed the PIP invoice in 2021, the urge for food for auto insurance coverage reform in Tallahassee has chilled significantly.

So will the Legislature try auto insurance coverage reform in 2023?

“I don’t suppose so,” Massive says. “I feel that the advocates who’re shifting for a invoice to go from PIP to BI in all probability acquired a really clear message from Gov. DeSantis vis a vis his veto, and I don’t suppose they’re going to attempt to convey up a invoice up in 2023.”

However the future isn’t all dangerous information for Floridians hoping to save lots of on their auto insurance coverage payments. In contrast to property insurers, who’re dissolving and abandoning Florida at an alarming price, the auto insurance coverage trade stays sturdy in Florida, with greater than 50 firms writing insurance policies for motorists.

“In case you have a look at all of the insurance coverage merchandise across the nation, auto insurance coverage is probably the most aggressive,” says Friedlander. “Charges differ considerably between firms. And we all the time advocate (that you just) store your protection in case your charges are going up, as a result of you may get a number of quotes and completely different low cost packages that may aid you.”

Right here’s a listing of automobile insurance coverage charges by states and Washington, D.C. in 2022, from an evaluation by insure.com: