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Since the beginning of the pandemic, Florida has been one of the states in the country that’s gained a significant number of residents. From April 2020 to April 2021, the state saw nearly 330,000 new residents.
There are a lot of reasons people move to Florida, and they have for decades, even before the pandemic. The lower cost of living, no state income tax, and lower property taxes are big motivators for a lot of people.
That low cost of living means that people coming from higher-cost states like New York or California can get more bang for their buck in most areas, but that’s not always true. The cost of insurance in Florida tends to be higher than in many other places, and now in the wake of the recent hurricane, a lot of people are dealing with problematic insurance companies or the consequences of not having adequate coverage.
Average Cost of Insurance in Florida
Below, we talk more about the general things to know about insurance costs in Florida.
While you might think it’s fairly obvious that flood insurance, for example, is more expensive in Florida, given the history of hurricanes and storms, car insurance is as well.
Car insurance quotes in Florida come in at an average of around $1,742 a year. That’s significantly more expensive than the national average—which until a few years ago, was 1,311 per year.
From 2021 to 2022, the average yearly premium for policies with full coverage in the Sunshine State went up 17%. That led the average annual cost to soar to $2,762, while the average national average has gone up to $1,771 per year for full coverage. For the minimum coverage policy, the annual average cost is $997.
Based on these most recent numbers, Florida residents can anticipate paying nearly 56% more for car insurance. The state is the third-most expensive in the country, behind New York and Louisiana for car insurance.
Eighteen-year-old drivers in Florida pay, on average, $8,117 per year for full coverage policies.
According to data from Bankrate, people in coastal areas and larger cities tended to pay higher average premiums because of a higher cost of living and an increased risk of being involved in an accident.
In Florida, home insurance rates are almost triple the national average.
Florida homeowners pay an average of $1,648 per year for a policy with dwelling coverage totaling $250,000, compared to a national average of $1,383. Carriers are increasingly exiting the state, though, and the 2022 hurricane season may be worse than average, with Ian already making an impact.
Plus, there’s fraudulent litigation affecting insurers, meaning that the rates could go up, and it could be harder for people in Florida to find coverage at all.
Even though insurance reform bills were passed in Florida in May, the market’s struggle continues. Insurance companies aren’t able to stay solvent in a location where there’s a high risk of widespread damage.
When insurance companies haven’t left the state voluntarily, many have gone insolvent, or they’ve increased their underwriting restrictions, putting pressure on homeowners to find coverage.
Fraudulent roofing claims are the reason for all the issues and the rising costs of homeowners insurance in Florida.
These claims are known as an assignment of benefits problem. It’s not just fraudulent, but it’s also a mix of taking advantage of loose regulations. A contractor will go to someone’s door after a storm telling them they can get a new roof for the homeowner. The contractor inspects a roof, and maybe there’s not that much damage.
The contractor says they’ll take care of everything if the homeowner is willing to sign over the insurance benefit. The contractor can claim what they want from the insurance company, and they don’t need the consent of the homeowner. If the insurance company ultimately determines the damage wasn’t covered, the contractor can sue.
The insurance company then either has to fight the lawsuit, or they have to settle, with both options being expensive.
Another issue that’s somewhat specific to Florida is that many people don’t have flood insurance. Only around 14% of homeowners in Florida pay for flood insurance, which is available through the National Flood Insurance Program and is federal. Someone without flood insurance might file damage claims with their property insurer, saying wind caused the damage.
Homeowners’ and renters’ insurance policies don’t include coverage for storm surges or floods, but you can buy a policy through a private insurer as well as the National Flood Insurance Program. The average cost of a program through NFIP is $662 annually. A private insurer may be cheaper.
How much someone might pay for flood insurance can vary depending on the state, so Florida may be significantly more expensive with your proximity to water and the amount of coverage you need.
Families in Florida, according to a study from the Commonwealth Fund, are hardest hit by health insurance costs than in any other state. Employees choosing family coverage, on average, had to pay $7,674. For single coverage, Florida averaged the third-highest rates in the country at $1,811.
Employees in 2020 in Florida paid more for their health insurance than people in almost every other state.
One reason these costs are high compared to the national averages is that employers don’t cover as much of the costs as they do in other states. Employees take on more of the burden oftentimes.
The problem has continued to get worse over the past ten years. In 2010, people in Florida spent 10% of their median income on their premiums and deductibles for health insurance, and it’s more than 16% now.
While Florida certainly is a state that has a relatively low cost of living compared to more expensive locations, that doesn’t always tell the whole story. Things like housing and transportation can be lower, but insurance costs can be significantly higher, so you have to make sure you consider all costs if you’re thinking about making a move based on cost-of-living.