October 22, 2011

Trends You Can Expect To See In Florida Car Insurance Rates

Given the heavy competition in the car insurance industry for their business, consumers might think auto insurance costs would be going down or at least staying even with inflation. This isn't the case though. Rates have been following a steady upward climb for several years. In particular, Florida car insurance rates have seen a continual rise. No one is cutting rates and all major insurers in the state have been steadily raising premiums. One of the best predictors of future insurance rate trends is the past, and it seems Florida car insurance buyers stand a good chance that their premiums will continue to go up.

Buying auto insurance is not quite like buying life insurance where the consumer purchases just one type of coverage. Auto insurance costs are comprised of a number of separate types of coverage. As long as state minimums are met, consumers are free to set the amount of coverage they want and to opt in or out of different non-mandatory coverage categories. When buying a policy, it's a good idea to know what the rate trends are for certain types of coverage.

The rise in Florida car insurance rates is primarily driven by the increased costs of personal injury protection coverage. This type of coverage protects both passengers and drivers hurt in a car accident. Florida is a no-fault state and under its laws medical bills for any injured person are covered up to $10,000. Insurance companies are experiencing ever-increasing losses in providing this mandated coverage. Analysts cite these losses and the need to cover them by charging higher premiums as the main reason behind the Florida rate increases.

Not only have personal injury claims and payouts shot up in recent years, but so has fraud. Florida is the leading state for staged car accidents and the subsequent fraudulent claims made. The state has not been able to arrive at compromise legislation to address the fraud and it is expected that the losses to insurance companies will drive the continuing trend of increasing auto insurance rates.

Another factor that will continue to affect premium increases is Florida's growing population. For several years, the state has experienced a positive population growth. More cars and drivers on the road mean more accidents. The claims from increased accidents mean higher costs to companies which are passed along as rate increases. It is expected the population growth trend will continue and affect the rate of premium increases.

The costs for some types of coverage, such as collision and comprehensive, have declined. However, the effects of fraud and population growth trends will continue to push Florida premium rates higher in the near future.