Florida is likely one of the least inexpensive states for private auto insurance coverage, based on a brand new examine by the Insurance Research Council (IRC). Claims traits are pushing premium charges up nationwide, and Florida is being hit notably laborious.
In 2020, the common expenditure for auto insurance coverage was $1,342 in Florida, greater than 30 % greater than the nationwide common, the IRC report says, citing knowledge from the National Association of Insurance Commissioners (NAIC). In phrases of affordability, IRC says, auto insurance coverage expenditures had been 2.39 % of the median family earnings for the state. Only Louisiana was much less inexpensive.
“Efforts to improve auto insurance affordability must begin with the underlying cost drivers,” the IRC report says. In practically each of those classes, Florida prices are properly above the nationwide common:
Accident frequency: The variety of property injury legal responsibility claims per 100 insured autos in Florida is 10 % above the nationwide common.
Repair prices: For years, the common value of a property injury declare in Florida was beneath the nationwide common. However, proof suggests restore prices are growing quicker in Florida than elsewhere.
Injury declare relative frequency: Floridians present a larger propensity to file damage claims as soon as an accident happens, with a relative declare frequency 40 % greater than the nationwide common. Florida is the one no-fault state with an above-average ratio of bodily damage to property injury declare frequency.
Injury declare severity: The median quantity paid per declare for auto damage insurance coverage claims for all damage coverages mixed is way greater in Florida.
Medical utilization: Florida auto claimants are extra seemingly than these in different states to obtain diagnostic procedures, akin to magnetic resonance imaging (MRI).
Attorney involvement: Florida claimants usually tend to rent attorneys. Attorney involvement has been related to greater declare prices and delays in settlement time.
Fraud and buildup: The proportion of all auto damage claims with the looks of declare fraud and/or buildup is proof of Florida’s tradition of fraud.
Uninsured motorists: Florida has one of many highest charges of uninsured motorists, each a symptom and a reason behind affordability challenges.
Litigation local weather: According to a survey of enterprise leaders, Florida’s authorized setting ranks close to the underside of state legal responsibility programs when it comes to equity and reasonableness.
“Unique features in Florida’s insurance system and a long‐standing culture of claim and legal system abuse have allowed some medical and legal professionals to generate substantial income for themselves at a significant cost to Florida drivers,” mentioned Dale Porfilio, IRC president and Triple-I chief insurance coverage officer. Triple-I and IRC are each affiliated with The Institutes.
Policymakers within the Sunshine State enacted substantial property insurance coverage reform in late 2022 to handle the affordability and availability disaster in owners’ insurance coverage and pledged to deal with related points in different strains of insurance coverage to ease the monetary burden that paying for auto insurance coverage represents for Florida drivers.
Bills being addressed by the state’s Senate and House give attention to vital tort reform to cease lawsuit abuse, together with the elimination of one-way lawyer charges for litigated auto claims and abolition of project of advantages for auto insurance coverage claims — a generator of fraud and litigation. One-way lawyer charges permit drivers who efficiently sue their insurer to recoup lawyer charges – however not the opposite method round.
Learn More:
Florida Insurance Crisis Reforms Gain Momentum With Latest Proposal
Florida and Legal System Abuse Highlighted at JIF 2022
Fraud, Litigation Push Florida Insurance Market to Brink of Collapse
Why Personal Auto Insurance Rates Are Likely to Keep Rising
Florida’s AOB Crisis: A Social-Inflation Microcosm
Triple-I Issues Briefs:
Florida’s Homeowners Insurance Crisis