Critics Say No-Fault System to Blame for Florida Insurance Costs
According to a recent survey by bankrate.com, Florida has the fourth most expensive car insurance rates in the entire country. The survey ranked all 50 states using the median annual cost of insurance premiums as reported by the National Association of Insurance Commissioners for the years of 2006-2010. The median cost of a Florida premium was $1,042, the highest was New Jersey at $1,119, and the lowest was South Dakota at $524.
Many industry experts believe that the increasing number of claims in Florida’s no-fault insurance system is to blame for high insurance costs. According to the Insurance Information Institute, an organization dedicated to improving public understanding of insurance, the average cost of a claim in Florida has increased by 34% over the past 5 years. Although, it appears that the cost of claims are beginning to fall at a moderate rate, less than 2% of last year’s average costs.
Critics claim that fraudulent claims cost the insurance industry a lot of money, which cause insurance premiums to rise. Many of these reformers have backed a controversial new law that may take effect this year to ban certain medical services such as acupuncture and massage services, as well as limit policyholders to $2,500 in non-emergency benefits. However, the new law has not been able to take effect due to pending litigation brought by medical care providers who believe that the new law usurps their rights.
Many, including Florida Governor Rick Scott, would like to keep Florida’s no fault system. However, the no-fault system seems to be disappearing around the country due to the high costs of premiums. For example, Colorado saw a 35% decrease in policy costs after dropping the no-fault system. States without the no-fault system reformed their insurance system, in part, on the belief that requiring the policy holder helps guard against insurance fraud.
Contact a West Palm Beach Personal Injury Attorney
If you or your loved one has been injured because of a wrongdoer call the West Palm Beach personal injury lawyers at the Law Offices of William E. Johnson, P.A. Schedule a free consultation today by calling 561-832-4848.