The Florida Policy Project commissioned a study on Florida’s insurance system and policy/process recommendations to improve the market for Floridians. Below highlights what is learned from the research and analysis of Dr. Lars Powell of the University of Alabama’s Culverhouse College of Business’ Center for Risk and Insurance Research.
Florida has the highest average auto insurance premiums in the country for a number of reasons, but it’s not due to our citizens being gouged by insurance companies. The state has a robust, competitive insurance marketplace and one of the lowest profit margins in the nation.
Lowering auto insurance rates in Florida, a state with about 7.5 million registered vehicles, is tricky. States with higher insurance rates tend to have large urban populations, and therefore more accidents and auto thefts. Florida also ranks near the top nationally for the prevalence of uninsured drivers. Hurricanes and other severe weather are also a factor in insurance costs. States that don’t face the same extremes are more likely to have lower rates. And when people in Florida get in a crash, they are much more likely to file a lawsuit than drivers in other states.
The Florida Policy Project commissioned a nationally recognized expert, Dr. Lars Powell of the University of Alabama’s Culverhouse College of Business’ Center for Risk and Insurance Research, to study Florida’s insurance system and make recommendations on policies and processes Florida should implement moving forward. The complete study can be found here.
The good news is that Powell found previous legislative action to address the high number of auto insurance lawsuits has helped bring prices down. But it hasn’t been enough to make up for big rate increases in recent years, and he advises the Legislature to watch for when lawyers start finding loopholes in current law and exploiting them.
Powell does recommend repealing Florida’s no-fault insurance law, or “personal injury protection” system (PIP). The system is designed so that regardless of who caused an accident, any injured driver must make a claim through his or her own insurance policy. Eliminating it would mean that drivers who cause accidents, and their insurance companies, would be first to pay for claims made by others injured in an accident.
During the 2025 Florida Legislative Session, the House Civil Justice and Claims Subcommittee approved a bill to repeal the system1. The bill did not pass the full House. The proposed legislation would have increased minimum bodily injury coverage from $10,000 to $25,000 per person in an incident. Opponents argued it would raise rates for people who carry minimum coverage, possibly leading to an increase in uninsured drivers.
Gov. Ron DeSantis vetoed a similar bill in 2021 and has indicated that he is still opposed to this year’s effort without assurances that other steps will be taken to prevent rates from increasing.
Beyond the repeal of the no-fault law, there are other policies the state should consider that can lower insurance costs, Powell said. The state should find incentives to lower its rate of uninsured drivers and consider efforts to make roads safer.
Powell’s research shows drivers that use a usage-based insurance policy can reduce their likelihood of a crash by 50%. But privacy concerns leave very few drivers to choose to install the technology that allows insurance companies to record real-time driving habits, such as when a driver operates a vehicle, miles driven and habits like hard-braking, speeding and sharp turns.
Powell believes more drivers would choose to install the devices if given the option to avoid fines and points on one’s license for traffic violations. The program should be strictly voluntary.
The state also could use license plate readers to identify cars on Florida roads that don’t have insurance. He notes that Tennessee and Oklahoma have adopted the practice. In both states, the rate of uninsured motorists involved in accidents dropped significantly – though in Tennessee the rate began to rise as uninsured drivers found loopholes, such as using fake dealership temporary tags. Oklahoma avoided the same problem by working with dealers to create unique and identifiable dealership tags. Oklahoma also requires offenders to purchase insurance policies that can’t be cancelled mid-term. Oklahoma went from having one of the highest uninsured motorist rates to being below the national average – and far below Florida’s rate.
Florida should also continue installing roundabouts to replace signals and signage at certain intersections, Powell concluded. His research shows that at any given intersection, roundabouts can reduce auto fatalities by 90% and injuries by 75%. Roundabouts force drivers to slow down at an intersection and eliminate head-on collisions and T-bone accidents by preventing left turns across traffic.
Another concern in Florida is uninsured drivers. Florida has one of the highest rates of uninsured drivers in the United States. According to the Insurance Research Council, approximately 20.4% of Florida drivers were uninsured in 2023. The Insurance Information Institute (Triple-I) provides details on uninsured drivers. The state with the highest percentage of uninsured drivers was Mississippi with 29.4%, followed by Michigan at 25.5%.
Reasons for the high rates include:
- Insurance Costs: Even though Florida insurers are focused on lowering premiums, Florida still ranks higher than the national average at $2,400.
- Minimal Insurance Requirements: Florida’s minimal no-fault requirement may lead drivers to underestimate the necessity of comprehensive coverage.
- Legal and Regulatory Environment: According to Triple-I, nearly 30,000 accident-related lawsuits were filed monthly in 2023—the highest volume of any state in the U.S.
- Tourists: Rental vehicle insurance gaps, unfamiliarity with local laws and increased accident risk all influence the state’s high rate of uninsured drivers.
While Powell’s report doesn’t have a “silver bullet” that could quickly reduce Florida auto insurance rates, the Florida Policy Project strongly recommends the Legislature and Department of Transportation consider best practices outlined in the Powell report. Best Practices include:
- Crack down on uninsured drivers using license plate readers, enabled by passing laws similar to those in Oklahoma and Tennessee.
- Encourage safe driving with voluntary telematics programs that offer incentives for installing devices that monitor driver behavior.
- Build more roundabouts, which are shown to reduce fatalities and injuries at intersections.
- Stay vigilant against legal loopholes that personal injury lawyers may exploit to drive up claims.
The Legislature must also continue to adjust state policies designed to reduce frivolous lawsuits. While reforms passed in 2023 have helped, the Legislature should continue to monitor and adjust the policies to ensure that personal injury lawyers don’t find loopholes to exploit.
While no single fix will dramatically lower Florida’s insurance rates overnight, the report outlines a series of practical steps—many with proven success in other states—that could make a meaningful difference.