Expect to Pay More on Your Premium in Florida
Any insurance company set their rates so that they can some amount of profit, and that isn’t a bad thing. If you want to have quality insurance, then they need to be able to pay their support staff and employees a decent wage as well as be able to have the money on hand to pay out quickly when an insurance claim does happen. But the operating costs and subsequent rates differ among states, and this is due to a wide amount of factors.
Take Florida for example. A state known to have a relatively low cost of living doesn’t enjoy the same out of its premium costs. Read the following reasons to better understand why car insurance in Florida can be so expensive.
Traffic Density
When you think about the congestion of the general population in Florida, then it makes sense why the rates are high. Rates are high because in places where there are more people, there will be more accidents and more claims. Throw in the fact that you have a warm weather state where traffic and activity are high all year long, and you can start to see why so many people who are congregated in just a couple of different cities can lead to a significant number of claims.
If you pay attention to the Florida Transportation Indicators information, you’ll notice that not only does Florida have over 14 million drivers, but that number also continues to increase. As you continue to put more people and more cars on the road, the point you need to remember is that the land mass of the state isn’t getting any larger. More drivers and more automobiles in the same space just means the roads are becoming more congested all of the time.
Age Disparity
One interesting thing about the state of Florida is the population mix. Because there are so many people in the area, you already have a great concentration of residents, but more than just the sheer number of people is the mix in age ranges as well. There is a significant number of retirees who love to enjoy warmer weather and calm sunsets, but you also have a much younger crowd of college students, recent grads, and younger professionals with a whole different agenda. When you combine the two on the roads, there is a great chance that differences in driving ability and differences in speeds will quickly cause problems and accidents.
Tourism
The tourism factor of the sunshine state is just another reason why drivers need to be cautious. With countless individuals coming down to the warm weather state and enjoying everything from beaches, the big city night life, and even the multiple theme parks, you have a simple recipe of highly stressed individuals who are tired and unaware of their surroundings being put on already congested roads. Disney World alone draws south of 20 million people each year, and they’re all crammed into the 47-square mile park of Lake Buena Vista, as stated by Small World Ninja. As much as the world wishes all these theme park-goers took public transit, a vast amount of them are driving their vehicles.
High Poverty
Although there are many benefits to living in the great state of Florida, the fact of the matter is that the wages are still considered somewhat low. Many people are able to survive a comfortable lifestyle (especially with no income tax) but many others are living in poverty or near-poverty levels. This will oftentimes lead to individuals driving uninsured or underinsured, and it means when many claims happen, the insurance companies will be the ones bearing all of the costs. In short, the high rates are due to you as a driver subsidizing the insurance of those who drive without coverage.
The sunshine state certainly has some great reasons to attract people of all ages. However, what’s more important than just being in the state is knowing what the general demographics are and how they can potentially affect your rates. You have to be sure that you know what you are getting yourself into, and if you aren’t careful, then you could be stuck overpaying on a policy. Know exactly what your policy entails so you can shop around knowing full well if another policy beats it. It’s your hard-earned dollars after all, and nobody is going to work as hard as you, to save them.
