State Farm Eyes Auto Rate Cuts When Fla. No-Fault Law Expires
State Farm would cut its car insurance rates by about 16 percent if the state's no-fault accident system ends in October as scheduled, the company said in a state regulatory filing.
This week's filing said that State Farm customers could expect to save about $360 a year on average for a two-car household if the state's no-fault auto insurance system isn't retained by state lawmakers. The individual changes would vary widely depending on coverages, discounts, geography and driver and car details.
The no-fault system requires drivers to get $10,000 in personal injury protection coverage, but puts restrictions on people's right to sue if they are hit in an accident and injured.
If the insurance system expires, drivers who cause accidents would be responsible for paying car repair and injury damages for those they hit, and people would again have the right to sue if they're injured in a crash.
The system was meant to try to lessen the number of lawsuits. But some insurance companies say it has been beset with fraud.
The proposed rate decrease by Bloomington, Ill.-based State Farm Mutual Automobile Insurance, Florida's largest auto insurer, is contingent on the no-fault system ending.
"Once no-fault ends, Florida families will have more choice in purchasing auto insurance coverage,'' the company said in a statement accompanying the rate filing. "Drivers will have the option to voluntarily purchase medical coverage — at less cost — to fit their individual needs.''
Customers would be able to buy optional medical coverage, but it would be cheaper than personal injury coverage. Some would be expected to forgo it, because they have health insurance to cover injuries.
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