Auto insurance rates in florida rises steadily

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Auto insurance rates in florida rises steadilyAll the four auto insurance majors have been battling for supremacy – including Geico, Progressive, Allstate, and State Farm. These are the biggest auto insurance firms in Florida and are competing with one another to get maximum business. They have been making irresistible offers and each one is promising better rates than the others and this might make you think that auto insurance is getting more affordable – but you might be wrong.

On the contrary, auto rates are high in Florida. Although this is one state where it has always been high, it continues to rise steadily with twice-a-year hikes in rates. This is a practice among a number of insurers since the latter part of 2009. All the major insurers have in fact, hiked rates.

Take a look at State Farm for instance. It insures one out of five vehicles that are driven in the state of Florida. State Farm has increased its average auto insurance rates, four times since November 2009. Each time, the rates have increased between 4.3 and 9%. So, if you were paying around $200 on auto insurance about one-and-half years ago, the same coverage will now cost you around $252 today – that would be 26% more, but why?

The hike is due to the PIP regulations in the state, states Chris Neal, State Farm spokesman. The losses that are being incurred due to PIP have continued to accelerate and there seems to be no end to it in the near future at least. This is the sole reason behind the increase in rates.

The Personal Injury Protection offers drivers as well as passengers, coverage when they are involved in accidents. As per the no-fault insurance laws, any person who is injured can get coverage of up to $10,000 for medical costs.

The main problem has been the fact that PIP claims seem to have skyrocketed in the state of Florida. There has been a hike in the PIP fraud as well. State investigators as well as insurers have cited an increase in staged accidents, where those with little or no injuries go to treatment centers and these centers in turn end up collecting up to $10,000 per individual by way of insurance payouts.

There was a push to bring down PIP fraud, but even that failed in the legislature, during the last session. This was partly due to concerns that it had overreaching effects. However, regardless of all this PIP claims are certainly on the rise.