Florida car insurance in 2023 out-paced the national average by almost double
The rising cost of Florida homeowners insurance has dominated news headlines since more than a dozen insurance companies have pulled out of the state or gone under completely in the past year. Flying under the radar is the rising cost of car insurance in Florida, which is about 37% higher than the U.S. average.
Florida drivers pay an average of $3,183 per year for full coverage, according to the latest numbers from Bankrate.com. Rates for minimum coverage average around $1,128, which is about 45% higher than the $622 national annual average.
In 2023, Florida car insurance rates increased year-over-year at almost double the rate of the national average, too, increasing $421 on average in Florida compared to $240.
Can you afford insurance? You finally can afford the car. Now, what about insurance? Why that could be a problem.
Here’s what you need to know about why car insurance rates are rising in Florida.
How much have Florida car insurance rates increased in 2023?
Bankrate released a new report in January that showed Florida car insurance rates increased at almost double the rate of the national average. Nationwide premiums rose more than $240 on average while Florida saw premiums jump up about $421 from last year.
Why do car insurance rates go up?
Nailing down why car insurance rates go up isn’t a straightforward process. Bankrate explains that there are more than a dozen rating factors car insurance companies use to determine premiums, and which city you live in is one of the most important.
In Florida, there is a 97% price difference between the average annual full coverage premium in the cheapest city (La Crosse) and the most expensive (North Miami Beach). Premiums in La Crosse are around $1,949 whereas they are a whopping $3,848 in North Miami Beach.
The reason rates can differ so drastically has to do with the frequency of claims, health care costs, the likelihood of weather damage and the cost of vehicle repairs.
Why car insurance is more expensive in Florida
Bankrate says that part of the reason Florida’s car insurance rates are so high is that it is the third most dangerous state to drive in. It also noted that insurance fraud is a common concern so prevalent that the Senate considered repealing no-fault coverage during the 2023 legislative session.
WalletHub.com added that the number of uninsured drivers in the state, increasing health care costs and Florida experiencing more severe weather all contributed to rising premiums.
What is the cheapest car insurance in Florida?
U.S. News & World Report that Geico is the cheapest car insurance in Florida with an average annual rate of $1,414 and that Allstate has the highest rate in the state, with an average policy costing drivers $3,169 per year. Those rates are subject to change based on several factors such as driving record, credit score, age and more.
Why is Florida homeowners insurance going up so much?
In October 2022, the Insurance Information Institute (Triple-I) published data showing that Florida leads the nation in homeowners’ insurance-related litigation, making up 79% of the lawsuits across the U.S. while accounting for just 9% of the total claims.
In the brief, Triple-I states that fraudulent roof-replacement schemes and too much litigation, coupled with generous attorney-fee mechanisms, resulted in huge net underwriting losses for Florida’s homeowners’ insurers.
Triple-I and other insurance companies have pointed to a 2017 state Supreme Court decision as the driving force behind an increase in attorneys’ fees. They say the decision now allows courts to award attorneys with much higher hourly billing rates. Previously, attorneys’ fees were limited to no more than 25% of any judgment against a sovereign.
Florida home insurance crisis? Floridians brace for yet another rate increase. Here's why.
Between 2017 and 2021, data from the Florida Office of Insurance Regulation showed that $51 billion was paid out by Florida insurers over 10 years. About 71% of that total went to attorney’s fees and public adjusters while only 8% went to claimants.
An increase in storm hazards played another important role. United Property and Casualty, a Florida insurance company that is in liquidation, wrote that between 1851 and 2018, 41% of the 292 hurricanes that hit the U.S. in that time frame also hit Florida — 37 of those 120 hurricanes were rated a Category 3 or higher.
A recently published study led by researchers from the Pacific Northwest National Laboratory and published in the peer-reviewed journal Science Advances looked at how climate change was strengthening hurricanes along the East and Gulf Coast.
Their takeaway? Hurricanes impacting the U.S. could rise by one-third compared to what we’re seeing now if things don’t change.
This article originally appeared on Pensacola News Journal: Is Florida auto insurance on the rise? It ranks as 6th most expensive.
