Smart Auto Insurance Blog

Currently only 12 states have no-fault laws in place according to the article “How Florida No-Fault Auto Insurance Laws Work” by Robert Fredricks on youronlineinsurance.com.  A no-fault law means that there is a limit on what a driver can sue another driver’s auto insurance company for.

Florida has a qualitative threshold with its no-fault law which means that for particular injuries or death the driver can sue the insurance company for up to a certain dollar amount.  These types of laws can keep auto insurance rates in check because the auto insurance companies are not getting sued for as much as in other states where just about any type of lawsuit is allowed.

Because of this type of regulation, Florida auto insurance tends to be lower which is great news for residents.  There are other states that have much stricter no-fault laws which only allow drivers to sue for the exact amount of injury or damages not already covered by the auto insurance company.  One downside to these types of no-fault laws is that when real permanent damage has been done the victim can be left short of what they truly deserve.  It can be hard for these victims to fight for what they believe is right.

According to the article “Lower Score? You Will Pay More” by Richard Burnett on sun-sentinel.com, auto insurance companies can increase auto insurance rates upwards of 50% if a policyholder’s credit score drops.

The article states that government regulators and consumer groups are trying to get the auto insurance industry to stop using the credit score as a factor in determining auto insurance quotes.  Credit scores have dropped as the economy struggles and banks tighten their lending qualifications making scores drop further.  TransUnion is one of the three big credit reporting agencies and they found that consumers in Florida and other large states have seen drops in their credit scores by about 10% and this will in turn affect Florida auto insurance quotes.

The insurance companies want to continue to use the credit score as a factor.  They claim if they stop using the credit score when calculating rates, premiums could rise by as much as 70%.  The credit score is only one of many factors used to determine a rate but the credit score actually carries more weight than your driving record.