Do you have any advice for Florida residents looking for the cheapest possible car insurance?
Finding affordable insurance involves a critical balance of identifying the right company, quoting the right coverage and finding the right price. Start by narrowing the companies you should consider by identifying the best-rated companies. If they are AM Best rated, you should only consider those with an A (A-, A, A+ or A++). This will guarantee your company is solid financially and is deemed one of the best available by an independent rating agency. Second, make sure you quote adequate coverage. This should be non-negotiable. State minimums create a ticking timebomb for your financial security. With the cost of medical care, our extremely litigious environment and the average cost of a new car now approaching $50,000, now is a particularly bad time to gamble on inadequate coverage. Talk to a licensed agent for coaching on how to set adequate limits. Finally, the price. The best approach is to shop around – the more quotes you get, the better your odds of finding that right price. Make sure you explore available discounts, as bundling your auto with homeowners or renters coverage can provide much better pricing. As tempting as it can be, never sacrifice quality (the right company) or adequate coverage for the sake of price.
Is there anything unique about car insurance in Florida that people who move to the state might not be aware of at first?
There are two key differences a newcomer will notice in Florida auto insurance relative to other states. First, we are a “no-fault” state, which means you must purchase Personal Injury Protection (PIP) coverage. In the unfortunate event of an accident, this coverage allows your own company to pay your medical bills (up to the policy limit), rather than having to establish fault and negotiate who pays for what. You should carefully consider the limit you choose, as medical care inflation has been particularly steep. Second, this state allows drivers to purchase a PIP/PD (personal injury protection/property damage) policy in an attempt to offer inexpensive, state-complaint coverage. I would strongly advise against choosing this coverage – please see my response to the prior question for an argument for adequate coverage. One additional note: Florida has a higher population of uninsured drivers (estimated around 28%) than any other state. Combined with the 38% of drivers who choose the PIP/PD policy option, roughly 64% of drivers on our roadways are uninsured or underinsured. Purchasing uninsured motorists and underinsured motorists coverage in Florida is imperative. Neither is required by law, but everyone should purchase both to manage the risk associated with our driving population.
What can people expect from the cheapest car insurance companies in Florida? When does it make sense to pay extra for better service?
Each insurance company promulgates and maintains their own auto insurance pricing structure. As a result, very good companies can have very competitive rates for some risks, and less competitive for others. Thus, it is not possible to say, uniformly, what to expect from the cheapest company for your risk profile. What can be said is that you should never trade the quality of your insurance company, nor the adequacy of your coverage, for a cheap price. If you do choose to buy simply on price alone, there is some meaningful chance you could end up with a company that either won’t be there at claim time, or won’t handle your claim well, resulting in a poor experience at a time when quality and service matter most. Experiencing an auto accident is definitively a very bad day. With your car out of service, and you potentially in the hospital, there will never be a more important time to have a solid insurance company working hard to get you healthy and back on the road again. Better service typically comes from better companies, so paying more to be sure you’ve signed on with a solid insurance partner always makes the most sense.