Florida ranks among top 10 for expensive car insurance

Florida ranks among the 10 most expensive states for car insurance, a new study finds — costing the typical resident $1,784 a year or 3.36 percent of household income.

That's more than twice the share of income eaten up in the least expensive states, Massachusetts and North Carolina, according to research released Monday by CarInsuranceQuotes.com, affiliated with Bankrate Inc. of North Palm Beach.

Florida's personal injury protection system in effect requires the typical resident to pay twice for medical coverage — through health insurance and again through car insurance. The U.S. Supreme Court's upholding of the Affordable Care Act last month likely means millions fewer Americans will lack health insurance, undercutting one argument for keeping personal injury protection in Florida — that many drivers have no other medical coverage.

In one of Gov. Rick Scott's top legislative priorities, personal injury protection reforms that began taking effect in Florida July 1 are supposed to crack down on fraud and bring down some costs over time. But the changes still preserve a $2 billion government mandate that requires Florida drivers to purchase the medical coverage regardless of whatever health insurance they already have, whether from Medicare, their plan at work or other sources.

A road Florida did not take — getting rid of personal injury protection or no-fault insurance — helped Colorado land in the 20 least expensive states, at No. 32. The last state to drop a no-fault system, Colorado saw its overall premiums drop 35 percent in five years. Its costs now for a typical resident according to Monday's study: $1,562 or 2.3 percent of household income.

Michigan, another no-fault state, led the nation with the most expensive insurance compared to household income. The typical household there pays 8 percent of its income for car insurance, or $4,490.

"Part of the reason why Michigan is so expensive is that it's the only state that guarantees unlimited personal injury protection," said John Egan, managing editor of CarInsuranceQuotes.com, in a company release. His firm's website offers one way for consumers to defend themselves — shopping around and comparing rates by zip code.

This year Florida lawmakers eliminated massage and acupuncture benefits from the state's mandatory $10,000 personal injury protection coverage and capped non-emergency benefits at $2,500. But Florida hospitals and insurers lobbied to keep the overall personal injury protection system. Hospitals are being paid under the new state law at twice the Medicare reimbursement rate.

Florida car insurers are supposed to reduce personal injury protection premiums 10 percent by October and 25 percent by 2014 or make a case to regulators why they should not. Personal injury protection represents about a fifth of the overall car insurance bill for many residents, meaning the total bill could drop up to about 5 percent — unless insurers persuade regulators otherwise.

Personal injury protection began in the 1970s in Florida as an effort to cut down on lawsuits and get payments out quickly for injuries in minor car accidents. But it has produced its own avalanche of lawsuits and for decades has been a chronic source of complaints about fraud and high premiums, despite repeated reform attempts.

One of the system's main selling points — that it gets payment out within 30 days — is weakened by Florida's new law, which lets insurers take three times longer to pay if they suspect fraud.