Hurricanes might mean Floridians get swamped again: With a car insurance increase

• Hurricane claims for car damage from the state's back-to-back events are approaching six figures.

Eva Kelly-Cubells knows her 2016 Chevy Cruze — and tens of thousands of other cars swamped in hurricanes Helene and Milton — did not go quietly.  

The 86-year-old Punta Gorda resident and her cat evacuated to a friend’s house on Sept. 26. There, Kelly-Cubells thought, she would be a safe distance from the canals and ponds that surround her manufactured home for Hurricane Helene’s anticipated visit. Deep in the night, though, she heard the water surging across the nearby road and then something even more ominous: a cacophony of car horns going off. 

“Then it would stop, and you’d know that was the end,” Kelly-Cubells said. 

Hurricane auto claims likely to hit six figures

The number of insurance claims on cars filed in Florida’s back-to-back hurricanes is approaching six figures: 91,975 filings for damaged passenger and commercial vehicles as of Monday, Oct. 28, data from the state Office of Insurance Regulation shows. And although Milton’s property damage claims dwarf Helene’s, Helene’s auto claims are 70% greater than Milton’s, state figures show. 

Luckily for drivers, unlike most homeowner policies, car insurance covers flooding.

But that coverage, consumers like Kelly-Cubells are finding, has limitations.

Policies will cover the present value of the vehicle, not the replacement cost. Meaning consumers are paid what their vehicle is worth, not the cost of new one. In her case, Kelly-Cubells' $9,500 payout from her insurer on her lost vehicle won’t be enough to get her back on the road in a comparable vehicle.

All holders of auto policies in Florida and elsewhere may also see some pain next year from the 2024 hurricane season. This season's storms are expected to deal a multibillion-dollar blow to the nation’s insurers in payouts, when the auto losses in Georgia, North Carolina, South Carolina and Tennessee get factored in. 

What kind of financial hit this will deal to Florida motorists’ insurance rates won’t be known for at least a year, insurance agents say.

But, spoiler alert, it’s not expected to be a good thing for the state’s residents who are already paying the third-highest car insurance rates in the United States at an annual average cost of $3,594 for full coverage, according to Bankrate.com, a personal finance website. The state falls just behind New York and Louisiana, Bankrate.com estimates. 

Same issue driving residential insurance costs hit car insurance

The storms are likely to aggravate matters more because just like companies that insure property, companies that insure drivers must rely on capital reinsurance markets to shoulder the risk of weather-related events and other catastrophes. And seeing one-two punches like Helene and Milton certainly won’t improve those back-up insurance capital markets, industry watchers say. 

“When reinsurance gets tight, costs to the insurance companies go up,” said Caple Howden, who runs an Orlando insurance agency bearing his name. “And so insurance companies, unfortunately, pass their costs on to the consumers.” 

Still, any bumping up of car insurance rates, like property insurance boosts, must undergo state regulators’ scrutiny before consumers get hit.

Mark Friedlander, director of corporate communications for the Insurance Information Institute, doesn’t expect the effect to be as dramatic on the car insurance side as it has been for residential policyholders’ rates.

“Auto insurers may purchase reinsurance (especially major national carriers) but vehicle losses from hurricanes are nowhere near the level of property losses in the scope of total insured losses from storms,” Friedlander said. 

Climbing car insurance costs somewhat moderated in Florida

National car insurance rates have gone up an average of 14% this past year because of rising accident frequency and severity, more fatalities and injuries, higher costs for fixing or replacing cars due to supply-chain issues and advancing technological sophistication, Friendlander said. 

Rates in Florida have been moderated somewhat by legislative reforms, such as a law that went in effect in May 2023 that prohibits customers from assigning benefits of their policies to windshield replacement contractors. That was aimed at reducing lawsuits and industry watchers say it has.

Kelly-Cubells says, however, at her age, she thinks it’s time to pull out of owning a car.

"I'd have to get a loan and I don't think I want to do that," she said.

So, she’s car-sharing with a friend and planning to put her insurance settlement into racking up some real miles: traveling to places she’s dreamed of visiting like Spain and the Holy Land. 

Anne Geggis is the insurance reporter at The Palm Beach Post, part of the USA TODAY Florida Network. You can reach her at [email protected]. Help support our journalism. Subscribe today.