Several organizations have annual ratings for the cost of car insurance premiums and every year Florida seems to end up in one of the top ten spots for the most expensive state in the United States in which to insure a car. It seems hard to believe since it’s a state with no snow or ice to increase the number of car accidents. So, why is Florida car insurance so expensive?
Believe it or not, Florida has more claims and losses than just about all other states. Because of this, it costs a lot for insurance companies to provide protection for customers in Florida. It’s really all about the numbers, and in the insurance world, more claims mean higher costs.
There are a few other factors that contribute to making Florida car insurance so expensive.
Florida Requires Personal Injury Protection (PIP) Coverage
A handful of states, Florida being one of them, require drivers to carry Personal Injury Protection insurance, also known as PIP. This makes Florida auto insurance premiums more expensive automatically because PIP is not cheap. This requirement can have Florida drivers paying as much as 20% of their premium payments toward personal injury protection coverage in Florida.
The short of it is that Florida used to be a no-fault insurance state, but scammers quickly figured out how to game the system. The scams because very sophisticated with people staging fake accidents and bribing doctors in order to collect insurance money that was automatic in a no-fault state. In effort to fix the broken no-fault system, the state began requiring drivers to carry PIP coverage by making it the law.
But, however unintentionally, this requirement has resulted in a steep rise in car insurance premiums in the State of Florida.
Florida is a popular place, especially in winter. In fact, Florida is the third most densely populated state in the U.S. Most all of the population of the state is located in the cities that ring the coast of this large peninsula. It stands to reason that densely packed urban areas create more opportunity for accidents simply because there are more cars and people in a tight space: accidents are bound to happen.
But this creates a risk for insurance companies, so population density is a contributor to the high auto insurance rates in Florida
Too Many DUIs
Florida has the dubious distinction of being one of the leaders when it comes to drunk driving incidents. And even though some of these incidents do not become car accidents, insurers still see a high number of DUIs as a risk. To combat the risk they feel they are taking, you will be charged higher rates just because of everyone else.
If you live in Florida and want to find the best rate around for PIP insurance, just use the InsuranceWins form to compare companies. The best way to combat high rates is to take advantage of discounts, and InsuranceWins can get you started.