Why is insurance so high? Clients seem to ask every year “why is my auto insurance so high”. We can all speculate on the increase in auto insurance rates here in Florida. Here is some of the information available as well as a few of the reasons given by different leaders that we would like to share regarding auto insurance rates here in the state of Florida.
Personal Injury Protection- Since 1972, Florida has required all drivers to carry $10,000 in PIP (personal injury protection) to cover minor accident claims regardless of who was at fault. Known as no-fault insurance, it was an attempt to clear the courts of accident-related lawsuits.
PIP actually accounts for one quarter of all auto insurance premiums. According to insure.com, Florida’s auto insurance rates were 4th highest in the nation (surpassed only by Michigan, Montana and Louisiana).
Four years ago Governor Scott and the legislature retooled the PIP law to attack rampant PIP Fraud throughout the state. Rates fell in the first two years (after the bill was passed) PIP premiums have risen nearly 15% in the last two years. One major carrier (Allstate Fire and Casualty) has raised rates 40% during that same period (according to an article in the Tampa Bay Times).
Auto Rate Increases- PIP premiums have been increased since January 1 (of last year) by nearly 15%. Lynne McChristian the Florida representative of the Insurance Information Institute cited auto insurance rates rising partially as a result of a decrease in unemployment which is the main reason why crashes have increased “you have more people with jobs to go to”.
Senator Jeff Brandes, R-St. Petersburg has said “it’s time to look at other options”. He filed a bill in the 2016 session that would have replaced PIP with higher “bodily injury coverage” but it never gained traction. Brandes also said that “abolishing no-fault is complicated in Tallahassee because it involves three very powerful competing interests: insurance companies, lawyers and the medical industry.
Usage of cells and texting- Crashes caused by “distracted drivers” has also been climbing even after passage of a new law in 2013 that made texting while driving illegal. Across the state, car accidents increased by nearly 9% (according to the Department of Highway Safety and Motor Vehicles) from the year before. More accidents mean more claims which insurance companies are using to justify “higher auto insurance rates”.
Another point made by the NSC ( National Safety Council) estimates that an upward trend in auto fatalities in the state of Florida- (18 % with only Oregon- 27% and Georgia- 22% being higher) as also playing a significant role in increased rates.
Florida's Limited Text Ban-In October, 2013, Florida enacted a limited ban on text messaging while driving. The law poses no limitations on cell phone use, however.
The law states: "A person may not operate a motor vehicle while manually typing or entering multiple letters, numbers, symbols, or other characters into a wireless communications device or while sending or reading data in such a device for the purpose of “non-voice” interpersonal communication, including, but not limited to, communication methods known as texting, e-mailing, and instant messaging."
In other words, drivers in Florida can't type into a virtual keyboard, or send or read messages. Keep in mind that even if a driver does manually enter information into a wireless device, that will not by itself result in arrest. A driver can only be charged for violation if arrested for another motor vehicle violation.
At Birchell Insurance Agency, we are an independent insurance agency with the ability to shop for the best price available for auto insurance coverage for you and your family. Call us at 407-920-3180 locally (or 800-978-8813 state-wide) to see how much we might be able to save for you on auto insurance today.
By The Numbers…
Premiums increased 14% (since January 1 of last year)
PIP- ¼ of total auto insurance premium (that most other states don’t have)
Auto accidents- nearly 9% increase over last year.
Auto related fatalities- 18% of all accidents (also an increase vs: last year).