Published on:

Report: Car Insurance Costlier for Florida Renters

Want a cheaper rate on your car insurance? Try buying a house. 

That’s the revelation from a recent analysis by the non-profit Consumer Federation of America, which discovered that Florida renters, on average, pay $279 more for car insurance – or about 10 percent higher – than those who own their homes. And apparently, the insurance companies are not shy about the fact home ownership is factored into their rates, except in California, where the practice is illegal.

This is troubling on a number of levels. First, there is the fact that its discriminatory and more likely to mean that lower-income and minority communities pay higher car insurance rates. Secondly, there is the fact that insurers are making it tougher for drivers who probably need it the most to obtain adequate liability coverage. 

That matters not just to them, but to everyone else who shares the road.

Consider that for starters, one quarter of drivers in Florida do not have any auto insurance coverage. None. That’s 1 in 4 drivers on the road. So if you get into a crash with one of those individuals, your only hope of recovery is probably going to be through your own uninsured motorist coverage. This coverage isn’t mandatory in Florida, but it’s highly recommended.

Now, let’s consider the fact that many more motorists are underinsured. That means they have the minimum mandatory amount of coverage – $10,000 in maximum bodily injury coverage per person in one accident, $20,000 for maximum bodily injury liability payout per accident and $10,000 for property damage to other vehicles. This is on the very low side, especially once you understand that if you’re in a serious crash, your medical bills are quickly going to surpass these limits.

So if we make it tougher for people to maintain even this level of coverage, we are creating a situation where the people who are going to suffer most is those who are injured in car accidents caused by the reckless actions of uninsured and underinsured drivers.

And Florida is not the only place where this is happening. Researchers say they looked at cities across the country by soliciting two premiums for a fictitious 30-year-old female driver with a 2005 Honda Civic and a perfect driving record. The only difference between the first request and the second was that in one case, the woman rented her home and in another, the woman owned her home.

In almost every city tested (except those in California) the rate was higher for the renter than the homeowner – sometimes considerably. For example in Tampa, Allstate charged renters 19 percent more than homeowners. In Baltimore, Liberty Mutual charged renters 23 percent more. And in Louisville, Farmers Insurance charged an astonishing 47 percent more to renters than to homeowners. That works out to an additional $770 a year for a basic auto insurance policy. And again – we’re not talking about people who had poor driving records versus those with good ones. Each applicant had a perfect driving record.

The average renter has a median income of $27,800, according to CFA officials. Meanwhile, the average homeowner earns about $63,400.

Insurers say that it does matter because, over time, renters are more likely than those who own homes to get into a crash.

Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights. Now serving Orlando, West Palm Beach, Port St. Lucie and Fort Lauderdale.

Additional Resources:

Fla. renters pay $279 more for car insurance, study finds, Feb. 8, 2016, By Charles Elmore, Palm Beach Post

More Blog Entries:

Wuthrich v. King County – When Vegetation Blocks a Driver’s View, Feb. 4, 2016, Palm Beach Car Accident Attorney Blog

Contact Information