Florida's auto insurance rates are high for a number of reasons, including state no-fault auto insurance laws, exposure to risk due to extreme weather conditions, average driver profile, and number of uninsured drivers. Living in Florida has many benefits for many different people. The sun, beautiful landscapes and attractions make it a great place to call home. However, one of the downsides of living in the sunshine state is that car insurance can be very expensive, which increases the true cost of ownership of most vehicles, as well as the overall cost of living.
While Florida is one of the most expensive states for car insurance for many different reasons, there are several ways to get cheaper coverage. Knowing why prices are so high in the first place can help you lower your insurance costs so you can enjoy a life in such a fantastic state. Because Florida requires relatively comprehensive auto insurance, many people wonder about the cost of that type of coverage. The truth is that insurance in Florida is expensive compared to the national average.
Insurance companies determine insurance premiums based on quite a few different factors. In Florida, many of them come into play and make prices much higher than in other states. Knowing what these factors are can help you understand why insurance is so expensive there. Florida has an incredibly high population due to its size, which makes it a very dense state.
Even though Florida is only 22nd in size, it ranks third in population in the United States. It is only left behind in California and New York when it comes to the number of people living in the state. Tourism is another factor driving up insurance rates in the state. Every year Florida receives 128 million tourists who try to see the different attractions of the region.
When people drive in an unfamiliar area, they are more prone to accidents and possible damage to vehicles on the road. Insurance companies understand this and take this into account when setting their rates in certain areas. Uninsured motorists will always increase the cost of insurance. This is because when you have an accident with an uninsured motorist, the company will pay for damages under uninsured motorist coverage.
This puts the company at much greater risk and costs them more money than they would pay if both drivers were insured. While Florida is known for having plenty of warm sun, it's also known for hurricanes and other extreme climates. This increases the likelihood that vehicles will be damaged, whether they are on the road or not. When bad weather conditions occur, more accidents are likely to occur and vehicles are much more susceptible to damage, leading to high rates.
This is especially true when people live near ocean, rivers, or other flood-prone areas. In the state of Florida, all drivers must have Personal Injury Protection insurance. This makes it a no-fault state. This comprehensive coverage is not required in most other states and increases the total cost of coverage for all Florida drivers.
PIP's no-fault insurance covers a large portion of the medical bills of both the vehicle driver and passengers, regardless of who was at fault for the accident. This coverage requirement increases costs for drivers by 20 percent and is one of the main reasons insurance prices are so high in the state. Every time an area has a population of high-risk drivers, insurance premiums will be higher. In Florida, there are a number of demographics that auto insurance companies consider to be high risk.
Tourists, seniors, young drivers, and students make up a large portion of the state's population, which translates into what insurance companies consider to be a greater risk. However, it should be noted that demographics like this are starting to be a minor factor in auto insurance premiums as time goes on. Companies are beginning to recognize that age is not necessarily a greater risk and are slowly starting to adapt. According to the Commonwealth Fund, Floridians pay much more for health care than the U.S.
UU. Because of this and the fact that the state requires insurance companies to pay for medical expenses incurred after an accident, no matter who was at fault, insurance prices are much higher. Companies know that they will end up paying much more by accident and adjust their rates accordingly. When insurance companies have to get stuck in legal matters, they tend to shift the cost to the consumer.
Unfortunately, Florida has a high prevalence of false insurance claims, as well as many claims involving legal representation. Because of this, companies have increased premiums to help offset some of the costs associated with processing these claims and resolving them through the legal system. As in most states, car insurance is required in Florida. This law keeps everyone safe and covered on the road and helps keep overall costs as low as possible.
If you are caught driving without insurance, the penalties can be high and you could even end up losing your license or the possibility of obtaining insurance in the future. If you are driving without insurance and end up having an accident, not only could you be held personally liable for any damages, but you will also have to complete an SR-22 certificate. This certificate could make you pay much higher car insurance rates in the future and even make it difficult to obtain any insurance. In Florida, you must have Personal Injury Protection and Property Damage Liability coverage.
Personal Injury Protection, or PIP, covers 80 percent of the medical expenses of an accident no matter who is at fault. Property Damage Liability, or PDL, pays for damage to someone else's property or vehicle if you are at fault. Although insurance rates in Florida are high, there are ways you can lower your individual rates. Insurance companies consider where you live, but they also consider many other factors over which you have control.
Knowing what these factors are can help you work towards getting the cheapest car insurance rates possible and keeping your driving costs low. The best thing you can do to keep your insurance costs low is to be a safe driver and keep a clean driving record. Most of all, companies will analyze your driving history and determine your rates. By driving carefully and avoiding problems, you can keep your costs low.
Insurance companies can't review the full report of your motor vehicle, but they can see things like fines, accidents, and any convictions you've had in the past related to driving. Depending on the company, they will analyze their history over the past three to five years. Some crimes, such as a DUI, will stay on your record for much longer and will have a greater effect on your insurance rates. The type of vehicle you drive will greatly influence how much you pay for insurance.
Safer vehicles, such as hybrids and family sedans, will be much cheaper to insure than high-powered, high-performance vehicles. If you want to get the lowest possible insurance rates, a safe car is your best option. Insurance Companies Analyze Your Credit Score When Determining Your Insurance Rates. They use this as a metric to assess risk when insuring you and your vehicle.
People with bad credit are much more likely to pay higher premiums. The higher your credit score, the lower your insurance premiums. You can increase your score and get good credit in many different ways. Things like paying bills on time, keeping your debts low, and having a long credit history can have a positive effect on your credit score.
A higher score can also help you get better rates on car loans and credit cards. If you live in a larger city like Miami, you're much more likely to have an accident on the busiest roads. Insurance companies understand this and will charge you a higher fee to help offset some of this risk. Living in smaller cities like Gainesville and Panama City will allow you to get lower rates on your car insurance due to smaller population and less crowded roads.
If you combine your different types of insurance, you can save money overall. By combining your car insurance policy with your homeowner's or renter's insurance, you can pay less for all of them. Depending on your insurance provider, you should be able to get all the insurance coverage options you need in one place. Getting as many quotes as possible for your car insurance can help you get the best rate.
All insurance companies are different and take several things into account when determining their premiums. You may receive very different auto insurance quotes from Allstate than you would from Progressive or Nationwide, so it's important to get quotes from a wide variety of providers. Many insurance companies offer discounts for certain driving habits and demographics. Discounts for things like being a good driver, having low mileage and being a good student can be applied to your final fare.
Some of these discounts can give you up to 25 percent off, which may bring your rates closer to the national average cost of auto insurance if you live in Florida. Check with your insurance provider or agent to see if you are eligible for any of these price reductions. One of the best ways to get a cheaper rate on your insurance is to drive the car less. Many companies offer per-mile insurance plans that will cover you like any other plan, but they will depend on the number of miles you drive.
If you only need a car once in a while, this could be one of your best coverage options. Although Florida has some of the highest insurance rates in the country, there are many ways to save money on your coverage. If you understand some of the factors that determine your fare, you can get the possible price. While you may not be able to control where you live, you can work on several other things to get a better rate for your car insurance in Florida.
This includes adding wind mitigation improvements to your home, bundling your home and auto insurance, and also increasing your insurance deductible. Here are some factors that affect Florida car insurance costs, ways to save on your car insurance rates, and insurance companies that offer the cheapest rates on average. Insurance Providers Increase Rate of Auto Insurance Premiums in States with High Proportion of Uninsured Motorists. All major insurance companies use a credit-based insurance score to calculate premiums where permitted by law.
Unprecedented natural disasters, increased phone-related car accidents, high rates of insurance fraud, and costly auto repair technology have increased costs for insurance companies. One of the biggest reasons car insurance is so expensive in South Florida is because more than 20% of Florida drivers don't have car insurance. Please note that at the time of publishing this blog, Florida drivers are one step closer to not needing “no-fault” auto insurance after lawmakers approved the repeal of the decades-old scheme and mandated that drivers have personal injury protection policies. Auto insurance companies generally increase their insurance premiums based on traffic because the more people drive and the closer they are to other vehicles, the greater the likelihood of a car accident.
It can also help you understand if the property has a history of flooding; if so, you'll want to buy a flood insurance policy in addition to your standard homeowners policy, since flood coverage isn't included in standard homeowners insurance. Both Progressive and Allstate premiums are 35 percent above the state average, making them two of the most expensive auto insurance companies in Florida, according to Insurance Panda. . .