There are few things you can really count on these days, but one of them is that Florida will rank among the most expensive states for insurance. We ranked third overall in a report recently released by financial analysis website NerdWallet.com. The researchers looked at the average costs of homeowners, health, life and auto insurance in each state and the District of Columbia and then determined what portion of the state’s median household income was spent on insurance.
By using household income, the researchers were able to show the real bottom-line impact of insurance costs on consumers. It would have been easy to rank from high to low overall, but that is not the story NerdWallet wanted to tell.
For example, Washington, D.C., reported that residents spent, on average, $6,027 on all insurance coverages each year, ranking 11th on the list. However, the District also reported the highest median household income at $63,971. As a result, the percentage of income spent on insurance was just 9.4 percent, putting D.C. in the 49th spot.
Florida has a couple of factors to overcome before we fall out of the top five or 10. The first is our comparatively high homeowners insurance rates. Our average premium of $2,084 was nearly $350 higher than the state that ranked second. Our median income, however, was just $38,621.
The result? Factoring in the high cost of auto insurance (ranking ninth) and our middle-of-the-pack health insurance costs (28th, for the time being), Floridians spend more than 17 percent of their income on insurance coverage. Louisiana, ranking first, came in at 18.1 percent, largely because of the state’s very high average auto insurance premium.
Legislatures and consumer advocates — even the insurance industry — could use this data to support any number of proposals for change. Consumers could find it a useful tool to use in relocation decisions.
Its usefulness does not end there. In Florida and in other states in the top 10 — in each category or the overall category — the report should serve as a reminder that they should be getting what they pay for. The high premiums may not reflect the best coverage, but they should count toward timely and accurate claims filing, responsive customer service representatives and a sincere commitment to fulfilling the company’s obligations to insureds.
Source: NerdWallet.com, “Where do People Pay the Most and Least for Homeowners, Health, Auto and Life Insurance?” Jeffrey Chu, June 22, 2015Share