Florida is without doubt one of the least reasonably priced states for private auto insurance coverage, based on a brand new examine by the Insurance coverage Analysis Council (IRC). Claims traits are pushing premium charges up nationwide, and Florida is being hit significantly laborious.
In 2020, the typical expenditure for auto insurance coverage was $1,342 in Florida, greater than 30 p.c larger than the nationwide common, the IRC report says, citing information from the Nationwide Affiliation of Insurance coverage Commissioners (NAIC). By way of affordability, IRC says, auto insurance coverage expenditures have been 2.39 p.c of the median family earnings for the state. Solely Louisiana was much less reasonably priced.
“Efforts to enhance auto insurance coverage affordability should start with the underlying price drivers,” the IRC report says. In practically each of those classes, Florida prices are effectively above the nationwide common:
Accident frequency: The variety of property harm legal responsibility claims per 100 insured automobiles in Florida is 10 p.c above the nationwide common.
Restore prices: For years, the typical price of a property harm declare in Florida was under the nationwide common. Nevertheless, proof suggests restore prices are rising quicker in Florida than elsewhere.
Harm declare relative frequency: Floridians present a better propensity to file damage claims as soon as an accident happens, with a relative declare frequency 40 p.c larger than the nationwide common. Florida is the one no-fault state with an above-average ratio of bodily damage to property harm declare frequency.
Harm declare severity: The median quantity paid per declare for auto damage insurance coverage claims for all damage coverages mixed is way larger in Florida.
Medical utilization: Florida auto claimants are extra doubtless than these in different states to obtain diagnostic procedures, equivalent to magnetic resonance imaging (MRI).
Legal professional involvement: Florida claimants usually tend to rent attorneys. Legal professional involvement has been related to larger 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 explanation for affordability challenges.
Litigation local weather: Based on a survey of enterprise leaders, Florida’s authorized surroundings ranks close to the underside of state legal responsibility programs when it comes to equity and reasonableness.
“Distinctive options in Florida’s insurance coverage system and an extended‐standing tradition of declare and authorized system abuse have allowed some medical and authorized professionals to generate substantial earnings for themselves at a big price 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 deal with the affordability and availability disaster in householders’ insurance coverage and pledged to deal with comparable points in different strains of insurance coverage to ease the monetary burden that paying for auto insurance coverage represents for Florida drivers.
Payments being addressed by the state’s Senate and Home concentrate on vital tort reform to cease lawsuit abuse, together with the elimination of one-way legal professional charges for litigated auto claims and abolition of task of advantages for auto insurance coverage claims — a generator of fraud and litigation. One-way legal professional charges permit drivers who efficiently sue their insurer to recoup legal professional charges – however not the opposite manner round.
Be taught Extra:
Florida Insurance coverage Disaster Reforms Achieve Momentum With Newest Proposal
Florida and Authorized System Abuse Highlighted at JIF 2022
Fraud, Litigation Push Florida Insurance coverage Market to Brink of Collapse
Why Private Auto Insurance coverage Charges Are Prone to Maintain Rising
Florida’s AOB Disaster: A Social-Inflation Microcosm
Triple-I Points Briefs:
Florida’s Owners Insurance coverage Disaster
Addressing Florida’s Property/Casualty Insurance coverage Disaster