Florida drivers pay the 3rd-highest car insurance in the U.S. Will it rise again in 2024?
While there's a great deal of attention on Florida's homeowners insurance crisis — which is bad, and getting worse — soaring car insurance premiums are crashing head-on into Floridian wallets. But a new study suggests they may level off in 2024.
Auto insurance rates surged 24% last year, according to insurance comparisons site Insurify, "as the rising cost of repairs, climate catastrophes, and severe car accidents contributed to record losses for insurers." The average cost of a full-coverage policy at the end of 2023 was $2,019 a year, taking up 2.6% of the median household income. That's nationally.
Here in Florida, the average annual full-coverage rate is $2,917 or $243 a month, the report said, 44% higher than the U.S. average and the third highest in the nation after New York and Nevada. Six months ago Insurify ranked Florida the 4th highest with full coverage premiums of $2,419. Florida also was ranked among 10 states where car insurance rates were rising the fastest.
Full coverage rates in the Sunshine State represent 4.3% of the state's median household income, $68,181, which is less than the U.S. average of $76,967.
Insurance rates in Florida were affected by severe weather events (hurricanes, tornadoes, flooding), the skyrocketing cost of auto parts, multiple insurers halting new policies or leaving the state completely, and rampant insurance fraud, Insurify's report said.
Which states pay the highest car insurance?
According to findings from Insurify's database of 97 million car insurance quotes from different insurance companies and a survey of 1,900 drivers across the country, the states paying the most for full coverage auto insurance are:
New York: $3,374, or $281 per month
Nevada: $2,975, or $248 per month
Florida: $2,917, or $243 per month
Delaware: $2,806, or $234 per month
Lousiana: $2,792, or $233 per month
Washington, D.C.: $2,756, or $230 per month
South Carolina: $2,680, or $223 per month
Maryland: $2,645, or $220 per month
Michigan: $2,640, or $220 per month
Rhode Island: $2,452, or $204 per month
The average cost of full coverage car insurance in the U.S. in 2023 was $2,019, or $168 per month.
Car insurance data from Bankrate, a consumer financial services company, estimated rates higher and says Florida drivers currently pay an average of $3,183 for full coverage.
How much did car insurance go up in 2023?
High inflation rates and fears of a recession that never happened saw average car insurance rates jump 24% to over $2,000 a year, Insurify said. About 63% of surveyed drivers said their rates increased last year, and 22% saw increases more than once (although they may have had a six-month policy).
Car insurance rates increased 638% more than wages increased in 2023on average, Insurify said.
How much will car insurance go up in 2024?
Nationally, car insurance premiums should start to stabilize, Insurify said, as the higher rates start to earn through and exceed the industry's losses. Insurify projects an estimated 7% increase.
However, Florida has unique problems with insurers fleeing the state, widespread disasters on the regular and the highest home insurance premiums in the country, so this general projection may not apply here.
Gov. Ron DeSantis' proposed budget for 2024-2025 includes breaks on taxes, fees and assessments for residential property insurance premiums and exemptions on flood insurance, but auto insurance was not mentioned.
Is Florida going to repeal no-fault car insurance?
One of the biggest drivers of car insurance rates is the high level of frivolous lawsuits and insurance fraud, experts say.
To combat this, Sen. Erin Grall, R-Vero Beach, filed SB 464 and Rep. Danny Alvarez, R-Hillsborough County, filed HB 653 to repeal the state's no-fault system and the mandatory $10,000 in personal injury protection (PIP) that has been in place in Florida law since 1979. The bills, which will be discussed in the current Florida Legislative Session, would instead require motorists to carry $25,000 in bodily injury coverage for injury or death for one person and $50,000 for injury or death to two or more persons in the same crash.
Proponents of the repeal say it will reduce insurance rates by reducing costly lawsuits and eliminating fraud. But critics said it would drive up costs for low-income Floridians who buy only PIP coverage and could put more motorists on the road without coverage.
DeSantis vetoed a similar bill from Grall in 2021, and another died in committee in 2023.
How are people reducing their auto insurance premiums?
More than 45% of drivers didn't do anything to reduce their premiums in 2023, Insurify said. Most of the rest increased their deductibles, lowered coverage limits, removed drivers from their policies or dropped full coverage.
Of the drives, 10.29% switched insurers. Just under 3% simply canceled all car insurance.
This article originally appeared on The Daytona Beach News-Journal: Florida car insurance rates have 3rd highest cost in the country
