Auto insurance rates in Florida continue to climb, leaving drivers with higher premiums despite recent tort reforms aimed at reducing costs. With the average annual cost for full coverage approaching $2,500, Florida remains one of the most expensive states for auto insurance—more than double the rates in states like Ohio.
“Who else has commercial auto insurance policies whose rates are astronomical?” asked Stacy Thompson, a realtor for Luxury Homes Real Estate in Vero Beach, on Facebook.
While factors such as hurricanes and flooding contribute to the increase, critics argue that abuse of the state’s legal system is a significant factor in rising costs. A recent analysis by R Street points to aggressive litigation tactics by "billboard attorneys" as a primary driver.
These attorneys, who use billboards, TV ads, and social media to target clients, often escalate insurance claims, forcing insurers to pay larger settlements. This drives up costs for all drivers.
Florida’s no-fault insurance system, which requires personal injury protection (PIP) regardless of fault in an accident, has also contributed to higher rates. Although PIP was designed to reduce litigation, the state's high rate of uninsured and underinsured drivers—more than 20% of motorists—has left insurers with higher risks and costs.
In February, the Insurance Information Institute (Triple-I) highlighted the role of excessive litigation in rising auto insurance costs.
“There are real costs behind what we all know and see plaguing our roads with promises of settlement dollars, as billboard attorneys are racking up fees, and consumers are found to be getting less and less. The price of insurance is the effect, not the cause of risk, and there must be more work done to curb legal system abuse, as auto insurers – both personal and commercial – are seeing significant increases in claims costs when attorneys enter into the picture,” Sean Kevelighan, CEO of Triple-I, said in a press release. “What’s more, there are multimillions of dark money investor dollars entering into the fray to try and get their share. Some of these investors are sovereign funds, which may very well pose increased national security risks.”
The rise of third-party litigation funding (TPLF)—a global industry where investors fund lawsuits in exchange for a share of any settlement—has further added to the issue. TPLF remains largely unregulated, contributing to more lawsuits, higher litigation costs, and increased insurance claims.
Despite legislative reforms aimed at reducing legal abuses, Florida’s auto insurance market remains volatile. High legal costs, along with weather-related risks, have led many insurers to leave the market. A lack of trust in the insurance industry is evident, with more than half of Florida consumers reporting low confidence in their insurers, according to J.D. Power’s 2024 U.S. Auto Insurance Study.
“This is causing the overall costs of claims to rise, resulting in premium increases being passed on to insurance customers,” Breanne Armstrong, director of insurance intelligence at J.D. Power, told Insurance Business Magazine.
Recent reforms have shown some positive results. Florida has approved seven new insurance companies, and the state-backed Citizens Property Insurance Corp. has transferred nearly 300,000 policies to the private market since October 2023.
However, proponents of tort reform argue that additional steps are needed to address ongoing legal system abuses that continue to affect the state’s auto insurance market.