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Florida Ranks Second For The Least Affordable States For Auto Insurance

A new study published by the Insurance Research Council (IRC) found that Florida has the least affordable auto insurance next to Louisiana. The study assessed all 50 states in the US and used an affordability index to determine the rankings. The index was based on a comparison of the average cost of auto insurance and median household income. These costs are the result of a variety of factors and the impact is statewide.

Why Is Florida Auto Insurance So Expensive?

The IRC found there are a number of factors of why auto insurance is so expensive in Florida compared to other states including :

The Number Of Accident Injuries: Florida is consistently ranked by the National Highway and Traffic Safety Administration (NTHSA) as having the most crashes across the country. Florida has the highest motorcycle accident rates, the second highest number of fatal accidents, and the third highest number of DUI accidents. More accidents, means more claims are being made for damages, injuries, and wrongful deaths. Those costs are then passed onto the consumers.

Personal Injury Protection (PIP): By law, Floridians are required to carry PIP insurance. As a result, Florida has a higher number of PIP claims than other states. PIP also creates a no-fault system that leads to rate increases for innocent drivers after an accident.

Higher Medical Costs: Floridians have higher medical costs than in other parts of the country. Specifically, the costs of diagnostic procedures have increased as a result of PIP to prove the significant and severity of auto accident injuries.

Higher Percentage Of Lawsuits: As a result of the complex and often unfair insurance laws, auto accident victims in Florida require the help of attorneys more frequently than in other states. In Florida, 53% of accident victims have had to seek the help of an attorney with their claim, while in other states it averages at 37%.

All of these factors impact the cost of insurance for Florida residents.

What Do These Costs This Mean For Floridians?

There are a lot of consequences for the lack of affordability of auto insurance. First, with auto insurance being so expensive, 27.6% of motorists in Florida do not carry insurance. It also means many drivers are also underinsured because they are choosing the least expensive plans. Both of these situations then increase the amount of accidents that require legal assistance. Secondly, with so many auto accidents, the amount of claims insurance companies are processing is very high. This leads to many insurance companies being bogged down with claims processes and as a result, many accident victims are not getting fair compensation. This also leads to a higher amount of legal claims.

Understanding PIP In All Of This

Florida’s PIP laws were designed to help reduce the costs and they have reduced the costs of tort liability claims. However, with rising medical costs, the minimum PIP rate of $10,000 rarely covers the full expenses associated with auto accident injuries. PIP also makes auto accident law more complicated and liability less clear. Both of these things lead to more legal cases simply to get a fair settlement. These costs and complications have lead to Florida lawmakers to call for a review of PIP laws.

The high costs of auto insurance in Florida causes a number of problems for motorists, especially after an accident. With the complexities of the Florida law and the resistance of the insurance companies to pay fair claims, many residents have to seek legal advice after an accident. Hopefully, lawmakers, insurance companies, and Florida citizens will be able to come up with new legislation that can reduce these costs across the board.