Car Insurance Costs Squeeze Floridians
FLORIDA — As consumers in Florida struggle with rising property insurance and rent, many drivers are now getting hit with steep increases in car insurance premiums.
How much did car insurance increase in 2023?
According to data from Kelley Blue Book, car insurance rates in Florida have increased an average of 30 percent in the past year, with some consumers seeing their premiums rise as much as 88 percent. While inflation is a significant factor, insurance costs can vary based on the type of vehicle you drive, your location, demographics and even your credit score.
Despite reports from the U.S. Bureau of Labor Statistics Consumer Price Index (CPI) that inflation is easing in 2023, auto insurance costs increased more than 17 percent across the U.S., indicating inflationary pressure on the industry.
Bob Passmore, Vice President of the American Property Casualty Insurance Association, said inflation has also caused the cost of car parts to skyrocket.
MORE EXPENSIVE REPAIRS
“It starts with the cost of repairs,” Passmore said. “Those kinds of things are up across the country. Some of it is just inflation, some of it is the increasing sophistication of vehicles making them more expensive to repair.”
Due to labor shortages and supply chain concerns, more expensive auto parts are contributing to rising repair costs. In addition to auto insurance rate hikes, the CPI reports that the cost of vehicle maintenance and repairs rose about 20 percent for most consumers in 2023.
MORE ACCIDENTS
Drivers are also causing more accidents. According to a State Farm media release in May, the company attributes its unprecedented $13.2 billion underwriting loss in 2022 to the increased severity of auto insurance claims.
“It really is a convergence of factors, including rising insurer losses due to increasing accident frequency and severity,” said Loretta Worters with the Insurance Information Institute. “There are also more fatalities and injuries on the road, leading to increased attorney involvement in claims.”
HOW TO GET THE BEST RATES
Worters says some carriers have rolled out three rate increases this year to stabilize their companies so they won’t have to go out of business. But there are still plenty of options to save on premiums.
Before changing your carrier, Worters says to review factors affecting your rates and go through an annual insurance checkup to ensure you get the best coverage for your specific needs.
Assess your coverage needs
The coverage type you have now might not fit your situation anymore. Determine how much car insurance you need and consider important factors such as your emergency savings and risk tolerance to choose coverage that’s just right for your situation.
Keep or work toward a clean driving record
Factors that affect auto insurance prices, like age or gender, aren’t within your control. But a careless at-fault accident or a speeding ticket can lead to a hefty rate increase from your insurer.
Consider a cheaper car
The value of your car can significantly affect the cost of coverage. According to Edmunds, used vehicle prices remain historically high, with an average increase in value of 44 percent since 2018. The five cheapest vehicles to insure are the Chevrolet Spark, Mazda 2, VW Golf, Hyundai Accent and Toyota Prius Prime.
Shop around to save
If you’ve been with the same company for a while, shop around or consult an independent insurance agent to see which insurer might best fit your family and your vehicle.
Consider telematics
Most insurance companies now offer discounts through usage-based insurance. Drivers who download an app or install a plug-in device that monitors mileage, driving habits and speed may save more money on rates. According to TransUnion, telematics use surged 33 percent in early 2022 as inflation increased.
Maximize insurance discounts
Insurance companies may offer discounts for students, seniors, military and veterans. Some carriers also offer discounts for safe driving or enrolling in traffic school.
Work to raise your credit score
Your credit score can significantly impact your car insurance rates. Insurance companies use a credit-based insurance score (CBIS) in their underwriting process to determine rates. Improving your credit score will make you appear less risky to insurers.