Steady rise in auto insurance rates in Florida

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Steady rise in auto insurance rates in FloridaThere is a stiff competition in the auto insurance industry in Florida. Some of the major companies such as Geico, State Farm, Progressive, and Allstate have been marketing their products quite aggressively and promising some of the best deals ever. This might even make you think that auto insurance is getting cheaper by the day, but that is not true. In fact, auto insurance rates are rising steadily.

Florida is one of the most expensive states when it comes to auto insurance. Despite the fact that it already has a high national average, the rates are hiked twice a year by most of the insurers. Since 2009, most of the big players have been hiking up the rates.

State Farm is one of the biggest players and insures one out of five vehicles in the state of Florida. It has raised the average auto insurance rates at least four times since November 2009. The rates have been increased between 4.3% and 9% every time, which means that if you had been paying $200 on auto insurance just over a year and a half, it would now cost you around $252 for the same coverage today, which is around 26% more.

Chris Neal who is the State Farm spokesman has stated that it is due to the PIP. There have been huge losses in the PIP and they continue to remain on the rise and there seems to be no end to it. This seems to be the sole reason for the rise in price.

Personal injury protection or PIP covers passengers as well as drivers who are hurt in auto accidents. The state has the no-fault insurance laws in place and anyone who is injured will get coverage up to $10,000 towards medical costs.

However, the main problem is that PIP claims seem to have skyrocketed in the state of Florida due to fraudulent claims. There are a number of staged accidents and insurers as well as the investigating officers are citing this as the number one reasons for the claims to shoot up. People go to these so-called clinics for treatment and these places collect up to $10,000 per individual from the insurance companies.

There was a major push to curb these fraudulent practices but it failed in the last session in the Legislature. This was due to the fact that there were objections from some sections of the attorneys and legislators that insurers were given 3 months to pay even legitimate claims.