Are car insurance rates going up in Florida?

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Car insurance protects you from having to pay out of pocket for damage to or the loss of your car as well as liability you incur from accidents or injuries you cause with your car. To keep your car insurance in effect, you need to pay monthly premiums.

Insurance premiums have been going up across the country, and this is true for Florida as well. One crucial coverage offered by auto insurance is your comprehensive insurance, which reimburses you for damage caused by covered weather events, and Florida is particularly prone to hurricanes and flooding. As a result, auto insurance premiums in Florida have increased by about 25% since 2019.

Why are car insurance rates going up in Florida?

There are several reasons for the increase in car insurance rates in Florida, but much of it may be due to Florida’s distinct approach to car insurance.

“In a no-fault state like Florida, everyone pays their own medical expenses with [personal injury protection] coverage, regardless of who’s at fault in an accident,” said Fran Majidi, a car insurance expert at SmartFinancial. “Because of this added cost, many Floridians drive uninsured, which is always expensive for everyone else on the road. Even though uninsured motorist coverage is not mandatory in the state, insurance agents are required to offer it.”

In addition, broader economic and weather trends have had a significant impact.

Rising repair and medical costs 

The cost of repairing modern vehicles has skyrocketed due to advancements in technology, including sophisticated sensors, cameras, and electronic components that are expensive to replace. Additionally, medical expenses for accident-related injuries have surged, driven by rising healthcare costs and increased legal settlements. In Florida, where personal injury protection (PIP) coverage is mandatory, insurers are paying out higher claims, leading to increased premiums for policyholders.

Climate and natural disasters

Florida’s vulnerability to hurricanes and flooding has placed immense financial pressure on insurance companies. Severe weather events result in massive claim payouts for vehicle damages, driving up the cost of coverage statewide. With climate change contributing to more frequent and intense storms, insurers are adjusting rates to account for the growing risk, making it more expensive for Floridians to maintain auto coverage.

Increased traffic and accidents post-pandemic 

Since the COVID-19 pandemic, traffic volume has surged as more people return to commuting, travel, and everyday activities. This increase in vehicles on the road has led to a higher number of accidents, putting additional strain on insurers. More collisions mean more claims, and as payouts rise, so do premiums.

Insurance company losses and market conditions 

Many insurance companies operating in Florida have faced significant financial losses due to the combination of rising claims, fraud, and catastrophic weather events. Some insurers have pulled out of the state or stopped offering auto policies, reducing competition and limiting options for drivers. As remaining insurers struggle to balance risk and profitability, they raise premiums to cover their losses, further exacerbating the affordability crisis for Florida drivers.

How much have car insurance rates increased in Florida?

Average car insurance rates in Florida typically become more expensive every year. All else being equal, annual premiums increased from $2,150 to $2,694, or about 25%, since 2019.

For this data, we compared rates for a Honda Accord LX with the following coverage:

• Bodily injury liability: $100,000 per person and $300,000 per accident
• Property damage coverage: $100,000 per accident
• Full coverage car insurance (with a $500 deductible)

Full coverage car insurance means:

Bodily injury liability: $100,000 coverage for each person, up to $300,000 per accident

Property damage liability: $100,000 in coverage for property damage per accident

The hypothetical driver we used to derive these rates is 40 years old, either male or female, has no violations on their driving record and a “good” insurance score, and commutes for 12 miles to work every day but drives a total of 10,000 miles every year.

Year-over-year comparison of insurance rates in Florida

Using the hypothetical driver and car above, we calculated the rates for the following years.

Average rate increases by top companies

Nearly all major car insurance companies in Florida have increased their rates over the years. In 2022, Farmers had the highest rates ($3,760 for the year) while Geico had the lowest ($1,550). But by 2023, both of these companies’ rates had changed significantly, with Geico increasing their rates by 43% and Farmers decreasing theirs by 13%, and in that year Allstate had the highest rates ($3,569) while State Farm had the lowest.

Florida vs. national car insurance trends

Florida has some of the highest car insurance rates in the country, with rates around 50% higher than the national average.

How do Florida insurance laws impact rate increases?

Florida’s unique insurance laws play a significant role in driving car insurance rate increases. The state follows a no-fault insurance system, requiring drivers to carry Personal Injury Protection (PIP) coverage, which pays for medical expenses regardless of who caused an accident. However, widespread fraud and excessive litigation linked to PIP claims have led insurers to raise premiums to cover mounting costs. Despite attempts at reform, fraudulent claims continue to strain the system, contributing to Florida’s status as one of the most expensive states for car insurance.

Additionally, recent legislative changes have allowed insurers to request more frequent rate adjustments, making it easier for companies to respond to rising costs associated with claims, vehicle repairs, and extreme weather events. The state’s vulnerability to hurricanes and flooding also impacts auto insurance pricing, as storm-related damage increases claim payouts.

How to lower your car insurance rates in Florida

While Florida’s high car insurance rates can feel painful, drivers can take steps to reduce their premiums. Shopping around and comparing quotes from multiple insurers may help, as rates vary significantly between providers. Bundling auto insurance with other policies, such as homeowners or renters insurance, can also lead to discounts. 

Additionally, maintaining a clean driving record and taking a defensive driving course may qualify policyholders for lower rates. For those struggling with high premiums, adjusting coverage levels – such as increasing deductibles or opting out of optional add-ons – can provide savings while still meeting legal requirements.

Zack Sigel

 

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Zack Sigel is a writer and editor based in New York City. He has been managing editor at Policygenius and M1 Finance, where he led teams specialized in writing about business and finance, and he has also written about music and culture for Hyperallergic, VH1, Complex, and the Los Angeles Review of Books. Zack has a bachelor's degree from New York University, Tisch School of the Arts.