Florida Has One of Highest Rates of Uninsured Drivers, Auto Insurance Costs

Florida has consistently had one of the highest rates of uninsured drivers in the nation. Now, a new study by the Federal Insurance Office, a branch of the U.S. Treasury Department, reveals that’s in large part due to the fact that auto insurance is unaffordable for millions of people in the Sunshine State.traffic

The study noted that affordable auto insurance is not just important for the safety of everyone on the roads, it also promotes financial security for individuals and families. Someone who owns a car and can legally drive it has more opportunity for economic well-being. Unaffordable auto insurance can leave people in the predicament of either not driving (which means they can’t work) or driving without insurance, which is not only unlawful, it puts themselves and other drivers at risk.

While Florida currently has a no-fault system for auto insurance (though that’s up for debate), a person who suffers more than $10,000 in damages can step outside that no-fault system to obtain compensation from the at-fault driver/ insurer. But if that driver doesn’t have insurance, it can leave the victim high-and-dry — through absolutely no fault of their own. That’s one of the reasons our Miami car accident lawyers so fervently recommend uninsured/ underinsured motorist coverage. It’s often the only recourse drivers, passengers, bicyclists and pedestrians have in the event they are struck by a driver who doesn’t have insurance or a driver who flees the scene and is never found. (In many cases, the reason drivers flee in the first place is because they aren’t driving legally and don’t have insurance.) 

Florida doesn’t require motorists to purchase or maintain UM/ UIM coverage, though companies do have to offer it and it can only be declined by the insured in writing. The state only requires individuals to carry a minimum $10,000 in personal injury protection (PIP) benefits and $10,000 in property damage benefits. Some drivers, such as those with a prior record of careless or reckless driving, may be required to carry bodily injury liability coverage, but it’s not mandated for most drivers. Insurers will usually recommend drivers buy it though because otherwise, they may find their personal assets in jeopardy if they are liable for an accident. In many of those cases, though, plaintiffs have difficulty actually collecting on those damage awards even when they prevail. Many defendants simply don’t have the income or property to cover the damages, and some even end up filing for bankruptcy.

What the FIO found was that nationally, there are about 19 million people living in areas where auto insurance is unaffordable. They define “unaffordable” as costing 2 percent or more of the consumer’s total household income. In Florida, there are approximately 2.8 million people for whom car insurance is not affordable. So perhaps it is no surprise that 1 in 4 drivers doesn’t have insurance. Of the 19 million residents who live in Florida, about 41 percent live in areas that are “under-served,” that is, have high concentrations of people who are minorities and low-to-moderate incomes. Of those who live in these areas, 30 percent are in areas where the cost of auto insurance exceeds 2 percent of the average household income, making it out-of-reach for many residents.

For a 40-year-old male driver with a clean driving record and decent credit, it will still cost $1,655 a year to maintain just the base-level of auto insurance. That’s 25 percent higher than the national average.

So long as this disparity exists, the more important than ever it is for Florida motorists to maintain UM/ UIM coverage to protect themselves in the event of a car accident.

If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.

Additional Resources:

Millions Live Where Car Insurance Is Unaffordable, Study Says, Jan. 25, 2017, By Ann Carrns, The New York Times

More Blog Entries:

Florida Pedestrian Accident Risk Higher Than Anywhere Else in U.S., Jan. 20, 2017, Miami Car Accident Lawyer Blog