Florida driv­ers may get a break

Anal­y­sis: Au­to­mo­bile in­sur­ance pre­mi­ums lev­el­ing off, de­clin­ing

South Florida Sun-Sentinel (Sunday) - - Front Page - By Ron Hurt­ibise

With auto in­sur­ers quick to blame ris­ing mo­tor ve­hi­cle crashes for the need to in­crease in­sur­ance pre­mi­ums in re­cent years, wouldn’t you think driv­ers would get a break af­ter crash rates de­clined be­tween 2017 and


Here’s some good news: Many Florida driv­ers will get a break on in­sur­ance rates this year.

An anal­y­sis of re­cent rate pro­pos­als by top auto in­sur­ers in­di­cate pre­mi­ums are lev­el­ing off and in some cases de­clin­ing for mil­lions of Florida cus­tomers.

For ex­am­ple, State Farm Mu­tual In­sur­ance Co., with 2.3 mil­lion pri­vate ve­hi­cle poli­cies in Florida, will lower its rates an av­er­age of 5.1 per­cent this March, ac­cord­ing to its lat­est fil­ing.

Pro­gres­sive Amer­i­can In­sur­ance Co., with 1.3 mil­lion pri­vate ve­hi­cle poli­cies, is plan­ning to lower its rates an av­er­age of 0.1 per­cent.

Ma­jor com­pa­nies that re­cently im­ple­mented or are plan­ning no rate in­crease in­clude Pro­gres­sive Se­lect (935,136 poli­cies), Ge­ico Gen­eral (765,501 poli­cies), Safeco

(223,621 poli­cies) and Hart­ford

(58,034 poli­cies).

Those fol­low a year in which to­tal mo­tor ve­hi­cle crashes in

Florida de­clined 0.6 per­cent, from 402,492 in 2017 to

399,934 in 2018, ac­cord­ing to the Florida Depart­ment of High­way Safety and Mo­tor Ve­hi­cles. Crashes with in­juries de­clined 0.5 per­cent while traf­fic fa­tal­i­ties de­clined 2.2 per­cent.

The tri­county re­gion fared even bet­ter, with to­tal crashes de­clin­ing 2.7 per­cent, from 134,697 to 131,054. Crashes with in­juries fell 2.2 per­cent, through fa­tal­i­ties de­clined only 0.9 per­cent.

It can’t be said with cer­tainty that the flat­ten­ing rates are a direct re­sult of fewer crashes in 2018.

In­sur­ance rates are based on com­plex for­mu­las that take a mul­ti­tude of fac­tors into ac­count. Loss pro­jec­tions play a large role, and they are gen­er­ally based on cost trends over re­cent years. Price com­pe­ti­tion can push prices down as well, and the Florida mar­ket is ex­tremely com­pet­i­tive, says Michael Carl­son, pres­i­dent and CEO of the Per­sonal In­sur­ance Fed­er­a­tion of Florida.

“It will be in­ter­est­ing to see how oth­ers fol­low. If State Farm is tak­ing rates down 5.1 per­cent, I guar­an­tee oth­ers will fol­low,” he said.

Na­tion­wide, spend­ing on mo­tor ve­hi­cle in­sur­ance in­creased 3.4 per­cent in Jan­uary com­pared to the pre­vi­ous Jan­uary, ac­cord­ing to the U.S. Depart­ment of La­bor’s lat­est Con­sumer Price Index re­port. That fol­lows in­creases of 7.4 per­cent and 8.4 per­cent the pre­vi­ous two years. Not all in­sur­ers plan to flat­ten or lower their rates. USAA, with 611,600 poli­cies across three prod­uct lines, plans to raise its rates be­tween 2.1 per­cent and 5.8 per­cent this March. And All­state Fire and Ca­su­alty plans a 4.5 per­cent hike for

786,000 pol­i­cy­hold­ers. Lynne McChris­tian, Florida rep­re­sen­ta­tive for the in­dus­try trade group In­sur­ance In­for­ma­tion In­sti­tute, said a sin­gle year of de­clin­ing crashes isn’t enough data to con­clude it’s caus­ing in­sur­ance rates to de­cline.

Too many other fac­tors re­main in play, she said. “Cars are safer, but driv­ing isn’t get­ting any bet­ter. Dis­tracted driv­ing re­mains a big prob­lem.”

Still, a year of de­clin­ing crashes “is a good sign, and por­tends well for the fu­ture,” she said.

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