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Insurance: Coming Changes In Florida Law

On Behalf of | Mar 2, 2015 | Insurance

Insurance lobbyists are always trying to change Florida laws to make their business more profitable, regardless of the harm it may cause.  Currently, Florida law forbids car insurers from setting rates in a territory as small as one ZIP code given concerns it could be abused to discriminate against low-income, minority or other customers, but there is a bill which cleared Florida legislative committees in both the House and Senate that could change everything.  

A national consumer advocate called it “dangerous,” but State Farm lobbyist, Mark Delegal, argued it was time to overturn a law that might have made sense 30 years ago but needs revising in light of computerized data today. “We believe the consumer protections are there,” Delegal said. HB 165 overturns the one-ZIP code ban and allows insurers to use smaller rating territories subject to approval by the state’s Office of Insurance Regulation as “actuarially measurable and credible.” Delegal told House members computer technology can break up the entire state and nation into one-kilometer squares with enough data to be credible. A national consumer advocate is skeptical. Setting rates based on a single ZIP code is not accurate nor makes sense when you look at the numbers said

Bob Hunter, director of insurance for the Consumer Federation of America. Mr. Hunter went on to say that this push to a specific rate is dangerous. That’s because larger groupings spread risk and ensure broad numbers of customers pay fair, comparable rates, he said, which is what Florida currently has. Even with Florida’s current laws, there’s plenty of room for abuse. Mr. Hunter’s group already sees insurers sometimes charge low-income drivers more — having nothing to do with their driving records but because of factors such as employment or credit reports. He says “price optimization” programs charge more to people considered less likely to shop around. A House staff analysis says regulators at the state’s Office of Insurance Regulation advised current law “was most likely enacted as an anti-red lining measure, and at that time it was probably considered unlikely that defining a territory consisting of less than two ZIP codes had a legitimate purpose.” The analysis continues, “However, OIR notes that given the increasing role of ‘big data’ in rating insurance, it may become more common for models including demographic data and insurance data to be used in the determination of rating territory boundaries in the future.

So, will this bill make a drastic change in our insurance rates. According to a recent article on CBS, it will. The CBS investigation found in many states your zip code has a dramatic impact on how much you pay, swinging the cost of coverage by hundreds, sometimes even thousands, of dollars. Actually, just changing the location of your garage by a few miles makes a massive difference, according to, which just completed a study of the impact of ZIP codes on rates. looked at 33,410 ZIP codes in the U.S. and calculated rates by surveying the nation’s six-largest auto insurers — Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm — based on coverage for a single 40-year-old male who commutes 12 miles to work each day, and drives a Honda Accord.

The average driver is not aware how much location impacts how much they pay for car insurance because there are many factors that go into setting your rate,” said Michelle Megna, managing editor of “But a lot of car insurance companies use your ZIP code as a starting point when setting rates, looking at how many claims they get from that ZIP for theft, vandalism, accidents — and the cost of those claims.” The study’s bottom line: Moving a few miles, often even in the same city, can save or cost you a bundle.

Where you live in Florida matters a lot. You can see a map of sample car insurance rates for every city in Florida below.




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