Auto insurance rates surging in the Sunshine State and South Floridians have it the worst
MIAMI -- Drivers in Florida have faced sharp increases in auto insurance renewal rates recently and motorists in South Florida will fare worse, experts say.
Ancelys Moreno is similar to thousands of other drivers in South Florida.
"I got hit with this massive $9,000 bill for my six-months car insurance premium," said Moreno who has been with the same insurance company for more than five years.
She went from paying $6,856 to $9,623, meaning she would have to pay over $2,760 for just six months of coverage.
Moreno called her insurance company to question the increase.
"I said I haven't had an accident or a ticket," she said. "I haven't had a change in zip code and they told the rate just went up."
The higher bill have walloped some South Florida drivers when they received their policy renewal notification.
"That's where the sticker shock may hit you," said Cesar Alas, a car Insurance agent from G.E.F.S. Insurance in Miami Lakes.
CBS New Miami asked him about Moreno's experience and those like her.
"If you are considered by the insurance company a higher risk, be it because of your driving or be it because of the experience in losses in your area, meaning stolen cars, you will be held responsible for that," he said.
He said it sounds unfair; yet, vehicle theft and accidents in the area where the driver lives determine the rate for their policy.
Additionally, Florida ranks number four in the nation in vehicle thefts.
According to American Property & Casualty Insurance, 45,973 vehicles were stolen in Florida in 2022, a 6% increase from 2021.
Experts at WalletHub.com and Bankrate.com say the additional reasons why rates differ so drastically in Florida:
- The frequency of claims.
- Health care costs.
- Weather damage.
- Cost of vehicle repairs.
- Uninsured drivers (20.4%)
"The number of accidents of uninsured motorists being significant and insurance companies having to bite the bullet on that, sends the price tag to the insured drivers," Alas said.
When it comes to solutions, he said there are options, not many but he does not suggest reducing vehicle coverage - especially because of uninsured drivers.
"The device is a good idea," said Alas, referring to car monitoring devices (or apps) which allow insurance companies to accurately identify their safest drivers and then reward them with discounts. "As long as you're going within (the limits) as a safe driver, they re-rate you and actually bring down your premiums.
Moreno did not consider the device; however, she chose another solution, paying a lump sum for the six-month-policy instead of monthly payments:
"They offered me the discount of paying $7,000 and I would save $2,000," she said. "I did not have the money, so I took it out of children's college funds."
She did say she does not know what she will do if the rate goes even higher next time.
American Property Casualty Insurance Association provided a list of tips for ways consumers can reduce their auto insurance costs:
- Get multiple quotes. "We recommend a minimum of three quotes to compare costs - auto insurance is very competitive and there could be significant price differences between insurers," the company said.
- Enroll in a telematics program, commonly called usage-based insurance. Many companies now offer drivers the opportunity to install a plug-in device or mobile app that can measure driving habits and price coverage accordingly. These devices track your average speed.
- Pay your bill in full at the beginning of your term.
- Take a defensive driving course.
- Take advantage of student and military discounts.