Florida Record

Monday, October 21, 2019

Florida Chamber of Commerce: Litigation increases cost of auto insurance


By Kayla Elder | Jul 26, 2019

Carolyn Johnson, Florida Chamber of Commerce director of business, economic development and innovation policy

TALLAHASSEE -- The Florida Chamber of Commerce believes a potential reform could provide a solution to high automobile insurance rates in the state.

“Litigation absolutely plays a factor in increasing insurance rates,” said Carolyn Johnson, the chamber's director of business, economic development and innovation policy.

A 2019 national study released by The Zebra shows Florida among the top three states with the highest rates.

“Unique to Florida is third party bad faith,” Johnson said. “The estimated costs due to third party bad faith is an additional $106 in claim costs for every insurance policy in Florida.”  

The Zebra report shows Florida has an average annual rate of $2,059. By comparison, the lowest in the nation, Maine, averages $896. The report ranks three Florida cities in the top 10 for paying the most for car insurance in the United States: Hialeah third at $2,997, Miami fourth at $2,913 and Tampa sixth at $2,786.

Although The Zebra report points to Florida’s no-fault insurance law as a contributing factor to the high insurance costs, Johnson disagrees, noting, “Repealing Florida’s no-fault statute does not guarantee decreased rates alone.” 

The no-fault law covers injuries to the driver only and pays the insured’s bills, regardless of fault, up to an insurance limit of $10,000. The report shows that personal injury protection/no-fault claims in Florida in 2017 were about 50 percent higher than the national average.

“The legislature should tackle third party bad faith and unnecessary litigation when considering reforms to Florida’s automobile insurance market,” Johnson said. 

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