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Auto Insurance Rates Florida

Policyholders Facing Higher Auto Insurance Premiums Due to Inflation in Florida

Sep 10, 2023

Undoubtedly, the cost of auto insurance in Florida has become significantly higher over the last few years. The main thing associated with the sudden rise in inflation affects not only Florida but the entire United States. If you live in Florida you may be asking yourself, “Why are auto insurance rates increasing?” Let us try to shed some light on that question for you.

What’s the impact of inflation on auto insurance premiums?

Inflation refers to a situation whereby the general cost of goods and services increases substantially over time, negatively impacting the purchasing power of money. Nearly five years ago, the cost of automobile insurance Florida was about $80 per month or $900 annually for minimum coverage.
This has increased by roughly 40% since that time. Today, in 2023, the current cost of auto insurance in Florida is approximately $115 monthly or $1,380 yearly. The significant difference is mainly linked to the impact of inflation on auto insurance premiums due to:

  • High cost of repairs- While the cost of other goods and services increases due to inflation, insurance companies face significant increases in repair costs as they strive to repair or replace damaged car parts after an accident. These costs also incorporate the salaries paid to laborers.
  • Increase in cost of cars- Due to inflation, you must have realized a substantial increase in the general price of vehicles, whether new or used. Therefore, insurance companies must also increase the cost of auto insurance premiums.
  • Legal charges- Inflation increases the cost of legal fees connected to settling auto insurance claims or defending against such claims. When these charges increase, insurance companies will likely add on premium costs.
  • Medical expenses- Medical expenses related to car accidents are also likely to increase due to the prevailing inflation. Therefore, insurance companies are forced to increase the rates of auto insurance premiums.

What are the main factors driving the increase in auto insurance premiums in Florida?

Besides inflation, other factors substantially drive the increase in Florida’s auto insurance premiums. First, the growing population across Florida directly translates to an increase in auto insurance premiums as the number of road accidents and claims doubles.

The increased number of insurance fraud cases in Florida–revealed through exaggerated claims and staged accidents–has led to a rise in auto insurance premiums as companies seek to protect themselves against fraudsters.

Policyholders may also be required to pay more for the legal processes of obtaining evidence connected to an insurance claim. Other factors driving the escalation of auto insurance premium costs in Florida are the type of coverage, weather conditions, frequency of accidents in a specific location, and type of vehicle.

What challenges do Floridians face due to rising auto insurance premiums?

According to a report compiled by the U.S. News1, 61% of Floridian drivers use their vehicles less due to the rising cost of car insurance premiums. Increased auto insurance premiums have brought various challenges to Floridians, including having to strain their monthly budgets to fit the intense expense alongside others.

Many drivers have also embraced limited auto insurance coverage options that sometimes may not fully protect them. Some Floridian insurance companies operate with a fear of fraud as there are those policyholders who try to reap where they didn’t sow.

High auto insurance premiums translate to an overall increased cost of transportation; hence, it becomes a challenge to Floridian commuters. The number of under- or uninsured motorists has increased significantly due to the rising cost of auto insurance, which is risky to drivers, motorists, pedestrians, and properties.

How can policyholders save money with the rising auto insurance premiums and inflation?

Everyone is feeling the effects of the rising rates of auto insurance, including policyholders, insurance companies, commuters, drivers, and the state. However, the burden is slightly heavier for policyholders, as they must have auto insurance. Florida requires this insurance for all drivers in the state. Therefore, some percentage of monthly earnings go toward car insurance premiums.

As an auto insurance policyholder, it is possible to find reasonably priced insurance during these tough economic times. Here are a few helpful tips:

  • Review various insurance coverages to identify the most effective and affordable option rather than settling on the first one you come across.
  • Adjust your insurance coverage options occasionally to suit your prevailing and future auto insurance needs.
  • Engage an auto insurance advisor about the best insurance coverage options for your vehicle(s). Insurance advisors are able to offer appropriate options after critically analyzing your needs, financial strengths, and other factors.

Final Thoughts

By understanding the relationship between inflation and auto insurance premiums in Florida, you will be able to make a more informed decision regarding insurance coverage. Remember, acquiring low-price insurance coverage doesn’t necessarily translate to savings. Look for highly reputable companies such as Del Toro Insurance for their expertise in obtaining appropriate insurance coverage for your unique situation. They serve the following areas: Hialeah Gardens FL, Margate, FL, Homestead, FL, Palmetto Bay, Cutler Bay, Hialeah Gardens, FL, North Miami Beach, Coral Gables, Hialeah, FL, Naples, FL, Miami, FL.

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