WHEN IT COMES TO AUTO INSURANCE, THERE IS ONE WORD ON EVERYBODY’S MIND: PRICE. Let’s be honest – no one enjoys spending money on auto insurance. It’s not very glamourous. There are a lot more fun things to spend money on. However, since auto insurance is a necessity, we tend to consistently ask the question –Read More...
Let’s be honest – no one enjoys spending money on auto insurance. It’s not very glamourous. There are a lot more fun things to spend money on. However, since auto insurance is a necessity, we tend to consistently ask the question – “How can I get the best rate?”
The reality is that every major auto insurance carrier in FL has filed for a rate increase this year, including the following: State Farm, Geico, Progressive, Hartford, Nationwide, Liberty Mutual, Allstate, Travelers, Mercury, Infinity, Nationwide, and 21st Century. (Geico and Progressive have actually both filed for two rate increases in the past year.)
Cost of ClaimsThe increasing cost of auto insurance claims is one of the biggest culprits in the rise of auto insurance rates both in Florida and across the country.Florida is a great place to live, but unfortunately we have much higher claims costs than other states. Why? In the United States, an average of 50% of bodily injury auto insurance claims involve attorneys. In Florida, however, 79% of bodily injury claims involve attorneys.This isn’t hard to believe considering how many attorneys advertise something to the effect of “If you have been injured in an accident, call so and so.” The truth is that attorney involvement in claims almost always results in higher claim pay out. Unfortunately higher claim costs don’t always mean more for the claimant, they’re just added cost.
Frequency of ClaimsAccording to a recent article by the Insurance Journal, in most states the cost of claims has risen in recent years, while the frequency of claims has decreased. However, Florida is one of the few “lucky” states where both the cost AND frequency of claims has increased.The bottom line is that insurance carriers have to raise rates in order to keep up with the increasing cost AND the increasing number of claims.Just as any business would have to raise prices in order to keep up with increasing costs, the insurance industry is no different.Think about it – if insurance carriers were experiencing this increase in the cost and frequency of claims and DIDN’T raise rates, it would mean that they were paying out more and more money without collecting the adequate amount of money.This would ultimately result in financial instability and probably eventually insolvency.
Number of Drivers on the RoadsThere are two reasons there are more drivers on the roads in Florida than ever before:First, our population has grown by about 1,000,000 people in the last five years. This naturally means more drivers on the road, which leads to more accidents, fatalities, and yes… more auto insurance claims.Second, since gas prices have been consistently low, people are driving more than they used to.“More miles driven, more cars on the road, more accidents,” said Allstate CEO Tom Wilson in a recent interview.According to the National Safety Council, the number of traffic fatalities was up by 14% for the first six months of 2015.This is a very disheartening statistic, and does in fact affect insurance rates.
GST taxpayers can't claim any pending input tax credit if this return is not filed by November 30, 2024 for FY 2023-24
