Report: Florida Renters Pay More for Car Insurance

Gregg Hollander | February 21, 2016 | Car Accidents

A new study by national consumer group Consumer Federation of America revealed that drivers in Florida who rent – as opposed to own – a residence are charged 10 percent more for car insurance.

In some places across the country, it’s even worse, with auto insurance companies charge 47 percent more to renters versus homeowners – regardless of their driving history. The group reached these figures by analyzing insurance quotes for a safe driver aged 30 in different markets.

Nationally, the average for renters was 7 percent higher – or another $112 annually – compared to drivers who own their home. The worst offender was Liberty Mutual, the group found, which charged a whopping 19 percent more to renters, which worked out to more than $300 a year.

In Florida, that 10 percent increase meant an average of $279 more a year for renters versus those who own a home.

First of all, this creates a hugely discriminatory act toward drivers who already can’t afford to buy their homes. So the lower the income, the more harshly they are being penalized. Minority neighborhoods tend to get hit the worst. And again, this has nothing to do with one’s driving record. The median income for U.S. renters is less than $28,000, compared to $63,500 for homeowners.

But secondly, that creates another major problem for everyone else. Consider that recent data shows 1 in 4 Florida drivers doesn’t have any insurance at all. None. It’s required by law, but the driver either can’t afford it or isn’t eligible to receive it.

Now, consider that these drivers who are renting and do have insurance are paying higher premiums. They are in turn going to be more likely to opt for a cheaper auto insurance plan. So for the rest of us, that means when those drivers are involved in a crash, they don’t have enough insurance coverage to pay the costs of the damage caused. That puts everyone else in a tight spot.

One of the ways smart drivers can protect themselves is by increasing their uninsured/ underinsured motorist coverage. This is a type of insurance that will cover an insured in the event they are injured as a result of a car accident caused by someone else’s negligence. This coverage extends even if you aren’t in the vehicle you normally drive. It could even extend to policy holders who are walking or riding a bicycle when they are struck by a vehicle.

Consumer advocates still are railing against a system that would unfair penalize good drivers with less income or savings. Said the director of the Consumer Federation, “A good driver is a good driver whether she rents or owns her home. Insurance companies shouldn’t be allowed to target people simply based on their home ownership status.”

Indeed. And some states legislators have made this point loud and clear also. Consider that in California, the difference between what is charged to renters and homeowners? Nothing. That’s because state law specifically forbids it.

Also, there is at least one insurance company – GEICO – that doesn’t take into account a person’s home ownership when setting their car insurance rates.

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