Reasons Florida drivers pay so much include the state’s susceptibility to severe weather such as tropical storms, hurricanes and tornadoes, Bankrate.com’s Cate Deventer wrote in an April blog post. Deventer also pointed to the state’s high percentage of uninsured drivers — 20.4%. That means one out of every five vehicles on the road is driven by an insurance scofflaw, which increases costs for uninsured motorist coverage.
Mark Friedlander, director of corporate communications for the industry-funded Insurance Information Institute, also pointed to high levels of medical billing fraud related to staged crashes and the state’s no-fault insurance laws, and a provision of state law requiring insurers to replace damaged or cracked windshields with no deductible.
“Contractors approach motorists at shopping centers, gas stations and car washes and offer to handle replacement of their damaged windshield in exchange for a gift card,” he said. “The motorist is asked to sign an AOB (assignment of benefits),” which gives the contractor the right to sue an insurer on behalf of the policyholder.
“Simple repairs are sometimes billed for thousands of dollars to insurers,” he said. “Many claims involve litigation filed against the insurer while the vehicle owner is not even aware a lawsuit has been filed.”
Auto insurance rates nationwide have increased after temporarily dropping when the COVID-19 pandemic forced people to stay home. Miles driven and accidents decreased sharply, and the auto insurance industry gave back about $14 billion in the form of cash refunds and account credits, Friedlander said.
But motorists quickly resumed their old driving habits after the economy reopened, and traffic fatalities also increased after decades of steady declines, he said.
Auto-related fatalities in Florida increased from 3,332 in 2020 to 3,629 in 2021, according to the Florida Division of Highway Safety and Motor Vehicles. That’s nearly a 10% hike that also boosts insurance costs and premiums, Friedlander said.
Inflation is also contributing to rate increases. “What we are now seeing are double-digit year-over-year increases in repair costs — driven by supply chain shortages of replacement parts and higher labor costs,” he said.
Rates are higher even than state averages in South Florida because of several factors, Friedlander said:
•Higher number of accidents and greater severity