Why the spike? Many feel car insurance costs are out of control

Mention car insurance to almost anyone, and the response is the same – “Mine has gone up!”

WINK News Traffic Anchor Rachel Cox-Rosen set out to take a deeper look at what’s driving costs up.

We are all supposed to have car insurance. Whether you have a quick five-minute commute, a daily hours-plus slog, or barely drive, it’s legally required.

In 2024, that means raking out thousands of dollars a year in Florida. According to Bank Rate, Florida is the third most expensive state in the U.S. for car insurance, with prices 51% higher than the national average.

Joe Fantozzi left his 2014 Ford Mustang in Estero when he and his wife returned to Canada for the summer. His insurance just went up another $250 bucks since they left. His yearly bill is now over $2,000 dollars.

“I mean, I’ve never seen anything like it. It’s disgusting to see this sort of an increase,” said Fantozzi.

He’s retired and on a fixed income. He tried to shop around.

“I’ve checked out rates on the computer with other companies, and I’m coming up with similar amounts of money,” said a frustrated Fantozzi.

Douglas Stevens hasn’t had any luck, either.

“I immediately started shopping around for cheaper insurance. However, come to find out there is none,” explained Stevens.

For his 2022 Chevy Equinox, Stevens is stuck paying over $2,600 a year—$218 a month—almost double what he paid when he first moved to Florida in 2015.

“Now I have to choose. Do I do the things that I would like to do or want to do? Or do I pay my car insurance and continue to be responsible as an insured motorist? I choose to remain insured,” said the Lehigh Acres man.

However, in Florida, 14.1% of drivers choose to go uninsured. That’s above the national average of 12%. Skyrocketing insurance rates mean that could tick up even more.

“That puts all of us at risk. And that will always, basically, keep us in a position where those rates are going to be high in order to anticipate the risk that these uninsured drivers may place on the industry as a whole,” warned Tasha Carter, Florida Insurance Consumer Advocate.

Uninsured drivers are just one thing that is making premiums shoot up.

“Key factors include high accident frequency and severity, congested roadways, costly repairs. Those have escalated 45% Over the past four years for both parts and labor, escalating medical expenses to treat accident victims, vehicle theft rates. And another big factor is litigated claims,” added Mark Friedlander, spokesperson for the Insurance Information Institute.

All that, plus severe weather events like Hurricane Ian.

“Hurricane Ian was one of the generators of rate increases in Florida over the last couple of years because we saw more than 100,000 vehicles damaged from the storm, and most of those are totaled,” explained Friedlander. “And it’s not just hurricanes. While the hurricanes get the big headlines for good reason, we have significant storm activity all year round in Florida.”

Another worry for insurance companies? Windshield replacement and other scams.

So, what can be done with all these factors driving up insurance costs?

“I think a major overhaul of the system is really the only way to make changes. We are starting to see some rate moderation, meaning the rate increases we’ve been seeing in the last few years are starting to slow down,” said Friedlander. “At this point, we’re not seeing rates decrease actually where you’ll see a net gain in terms of what you’re paying less.”

It is not a comfort to drivers like Fantozzi, Stevens, and many others.

Saving on car insurance

There are a few ways you might be able to cut your costs.

1. Shop around. According to BankRate.com, “Car insurance companies each have their own methods for calculating rates, and your own individual rating factors play a significant role.”
2. Ask your company what discounts it offers. Some examples include low mileage, safety features, good student and multi-policy discounts.
3. Check your policy. Only pay for what you need.
4. Increase your deductibles.
5. Improve your credit score. BankRate.com reported research shows that the worse your credit score is, the more likely you are to file a claim.