Report: PBC car insurance rates highest in West Palm
The wrecked vehicle in a 2015 crash in Jupiter, where insurance
A 30-year-old single man with a good driving history would pay nearly $2,800 a year for insurance on his 2014 Honda Accord EX if he lived just west of downtown West Palm, according to a Palm Beach Post analysis of data gathered by auto insurance price comparison website The Zebra.
That same man would pay less than $2,200 in the 33469 ZIP code of Tequesta, Jupiter Island and Jupiter Inlet Colony, the area in Palm Beach County with the lowest premiums, according to the study.
The Zebra examined more than 61 million rates across the country for its 2019 State of the Auto Insurance Report and shared some of its data with GateHouse Media. The theoretical driver had a standard insurance policy, including injury liability, property damage liability and a $500 deductible for comprehensive and collision.
The average yearly cost for insurance in Palm Beach County was $2,507, higher than the statewide average of $2,059.
Costs climbed higher in Broward and Miami-Dade counties.
The national average was $1,470.
In the three ZIP codes in and around downtown West Palm — 33401, 33409 and 33405 — rates reached $2,784.
Next highest in Palm Beach County, at $2,776 and $2,753, are Lake Worth Beach’s 33460 ZIP code and Palm Beach’s 33480, respectively.
More traffic means higher rates
Traffic helps explain why West Palm motorists pay so much, fraud is a factor that drives up costs in South Florida, and a controversial state law further raises costs for all Florida drivers, industry experts and advocates said.
Downtown West Palm, with its nightlife, its proximity to Palm Beach, Palm Beach International Airport and busy Interstate 95 exits, and its ever-growing number of condos, apartments and office towers, attracts thousands of commuters every day.
And more traffic leads to more crashes and higher insurance costs, said former Texas insurance Commissioner Robert Hunter, now director of insurance with the Consumer Federation of America.
“You get more crashes in Manhattan, New York, than in Manhattan, Kansas,” Hunter said. Small town policyholders such as those living close to Lake Okeechobee are charged less than those in more packed parts of Palm Beach County, such as West Palm Beach, Boca Raton and Delray Beach.
Two of the high-ranking West Palm Beach-area ZIP codes contain two busy I-95 exits — Belvedere Road and Okeechobee Boulevard.
Areas with higher crime levels did not necessarily have higher rates.
In West Palm, for example, policy quotes were lower in low-income neighborhoods such as Pleasant City north of Good Samaritan Medical Center, where crime rates are higher and residents earn less money than in downtown. Similar rates covered most residents of nearby Riviera Beach, as well.
Scams and no-fault
Scammers who rip off insurance companies help drive up insurance costs in South Florida, said Jeff Grady, president of the Florida Association of Insurance Agents. The result is that companies charge more.
“There’s a fair amount of fraud, staged accidents, in South Florida,” Grady said.
State laws that inflate insurance costs help enable fraud, Grady and Florida Justice Reform Institute spokesman William Stander say.
Florida is one of 10 states that forces drivers to buy no-fault insurance, also called personal injury protection, which raises policy prices in the state.
No-fault insurance pays up to $10,000 to drivers injured in a car crash for medical expenses — even if the driver already pays health insurance. It also covers lost work time.
State lawmakers have tried and failed for years to repeal the decades-old PIP law. Insurance companies, who fought to keep PIP, continue to raise premiums.
While the number of crashes has remained level in Florida in recent years, the number of no-fault claims and amounts that insurance companies pay out has skyrocketed, Florida’s Office of Insurance Regulation states on its website. No-fault claims make up nearly half of fraud referrals.
An area’s population density, road conditions, repair rates, medical and hospital costs and number of accidents help determine insurance premiums, spokeswoman Karen Kees said. She would not say why rates differ so substantially.
“It’s the lawyers and the doctors and hospitals who want the mandatory coverage because there’s a pot of gold there they can tap,” Stander said.
Stander cited cases in which, he said, lawyers sued insurance companies, in what he called bad faith, for failing to defend their policyholders in car crash lawsuits.
A ring of corrupt lawyers, chiropractors and clinic owners in South Florida scammed 10 insurance companies out of $23 million by taking advantage of the state’s no-fault system, a 2017 federal investigation revealed.
Boca attorney Jason Dalley was disbarred in 2018 and ordered to pay $1.84 million in that scheme.
A smaller part of fraud driving up insurance costs, Grady and Stander say, comes from fixing windshields, taking advantage of “assignment of benefits” agreements.
An unwitting crash victim signs away their right to pursue an insurer to a crooked mechanic, Grady and Stander said, who then fixes the windshield and bills insurance companies hundreds of dollars more for a job that could have been cheaper.
State lawmakers this year passed restrictions on assignment of benefits agreements but did not repeal the costly no-fault insurance system.
Florida’s priciest policies, estimated at $3,136 each year on average, are paid by drivers in the Miami neighborhood Allappatah and the nearby community of Brownsville.
The cheapest insurance quotes in the state, estimated at $1,582 annually, are in Waldo, an Alachua County town of about 1,000 that AAA designated as one of the worst speed traps in America until 2018.
GateHouse Media’s Emily Le Coz contributed to this story.