Basic personal auto insurance is mandated by most U.S states which helps you with some financial protection in case of an accident. The coverages one receives as part of auto insurance extend to property, liability, and medical coverages. After carefully going through auto insurance rates across the country, we found out that Florida is one of the costliest states to buy auto insurance in.
In 2019, the national average cost for auto insurance amounted to $1,457. Compared to this, the average cost for auto insurance in the state of Florida was at a staggering $2,219. While there are states like Michigan and Louisiana that showcase an even higher insurance rate at $2,611 and $2,298, Florida ranks in the top 3 when it comes to high auto insurance rates across the country.
The question which arises is then why are auto insurance rates so high in Florida? Let’s look at the major reasons for this unusual figure:
1. Driving Demographic:
Florida comprises of a varied set of driving individuals, most of which are uninsured, high-risk drivers. Moreover, being a tourist state, Florida witnesses the presence of a large number of people from different parts of the country as well as the world who are prone to reckless driving. Florida also happens to be a host to a large population of young drivers who may not always be careful with overspeeding and rash driving. Due to this, insurance carriers face a huge volume of auto claims which instigates them to increase the cost of insurance premiums for people. To top it off, Florida ranks first in the entire nation when it comes to the highest number of uninsured drivers.
2. Presence of Personal Injury Protection (PIP):
In the state of Florida, Personal Injury Protection, or as it is commonly known as ‘no-fault’ coverage, is a mandatory extension that is given to all auto insurance holders. Under this extension, a person involved in an accident is bound to receive compensation irrespective of his/her fault. This extension not only covers medical expenses but also compensates ‘lost wages’ for the insured. Moreover, it also includes any additional expense that was involved during the entire process, for example- transportation and repairing services. Due to this extension and its necessary presence in Florida, auto insurance rates automatically go up.
3. Extreme Weather Patterns:
Leaving the human element out of the way, Florida is notoriously famous for its hurricane season and even if someone is an exceptionally careful driver, they cannot predict sudden changes in the weather which may be potent enough to damage vehicles and property in general. Given the nature of, well…nature itself, Floridians witness a higher auto insurance rate than other states in the USA.
4. Your Location and Driving Record:
Just like every other state, insurers look at the kind of neighborhood you reside in, as well as your driving record. These parameters affect your auto-insurance cost and so does your credit score. If you are someone who is unable to pay bills on time and has a lot of debt, your insurance rate will go up. In fact, most of the time, insurers decline from even providing insurance in such cases.
So these are some of the most important factors that make auto-insurance such a costly investment in Florida. Despite the high rates, there are insurance companies that offer relatively cheaper auto insurance. To find about these companies visit our blog and read our article on ‘Top 4 Cheapest Auto Insurance Companies In Florida In 2020’.