Florida drivers are paying more to keep and operate vehicles than residents of any other state, new analysis shows.
Excluding the sticker price, owning a car in Florida now costs an average of $8,483 a year in recurring expenses—a 3.5 percent jump from last year—with insurance accounting for the largest single slice of that tally, according to research by BankRate.
Car ownership remains nearly universal across the United States: in 2022, 91.7 percent of households reported having at least one vehicle, and 278.9 million personal and commercial vehicles were registered nationwide. But while you might think the purchase price is the biggest cost of owning your own vehicle, the day-to-day and yearly costs of gas, maintenance, taxes and, crucially, insurance add up quickly—and nowhere more so than in the Sunshine State.
BankRate’s breakdown of the typical annual “hidden” costs in Florida lists insurance at $3,874, followed by fuel at $1,612, maintenance and repairs at $1,474, and vehicle taxes of $1,524. Those figures push Florida well ahead of the states with the lowest overall ownership burdens: New Hampshire ($4,472), Washington ($4,744) and Alaska ($5,131).
Why Is Owning a Car So Expensive in Florida?
Florida’s high costs come down largely to insurance, which ranks as the third most expensive in the country. Jennifer Gambill, an independent insurance broker with World Insurance Associates in South Florida, told Newsweek that the state’s unique mix of population, traffic, and climate all play a part.
“Unfortunately, there’s no single reason that makes Florida unique compared to other states; instead, there’s a multitude of reasons and all of them result in increased claims dollars paid by insurance companies which directly impacts the rates paid by policyholders,” Gambill said.
Weather is one risk, with Gambill pointing out that the state’s frequent storms, floods, and hurricanes make vehicles more susceptible to damage. “It doesn’t take a hurricane to cause flooding in Florida,” she said. “Strong summer storms can inundate roads, streets, and parking garages damaging vehicles with little notice.”
Beyond natural hazards, instability in Florida’s insurance market has also contributed to rising premiums in recent years. Gambill said that over the years, a lack of competition has left drivers with fewer choices and higher prices.
“With fewer insurers willing to provide insurance in Florida than in New Hampshire, there is less competition, which leads to higher premiums,” she said. “In New Hampshire, [the top five insurers] account for 60 percent of the personal auto insurance market share. In Florida, that percentage jumps to 80 percent.”
The state also continues to grapple with insurance fraud. According to Gambill, Florida’s 1971 No-Fault Law—originally designed to reduce litigation—has “ironically” fueled insurance abuse. Florida’s no-fault law requires drivers to carry Personal Injury Protection (PIP), which covers medical expenses, lost wages, and certain other costs regardless of who caused an accident.
With little public transportation and a population of more than 22 million—alongside over 140 million visitors in 2024—Florida’s roads can be crowded. “More cars mean more accidents, and more accidents lead to more lawsuits, which always inflates the cost of claims,” Gambill explained. In 2023, per 100,000 Floridians, there were 127.41 personal injury cases in court, a staggering 1,237 percent higher than the national average of 9.53, and 319 percent more than any other state.
These pressures on the insurance industry compound an already high cost of living in Florida, where housing and homeowners’ insurance are also among the most expensive in the country. But Gambill said there are early signs that the situation could improve.
“Recent reforms have been passed that aim to reduce litigation and fraud within the insurance industry, and early indications are that these reforms are having a positive impact on insurance premiums,” she said.
Florida’s top five auto insurers are cutting rates by an average of 6.5 percent in 2025, after raising them 4.3 percent in 2024 and 31.7 percent in 2023, according to the Florida Office of Insurance Regulation. The rate reductions come after major changes to Florida’s insurance tort laws in 2022 and 2023. The reforms ended one-way attorney fees, which had previously driven a surge in lawsuits against insurers.
Gambill said drivers can take advantage of these shifts by reevaluating their policies and shopping around for better deals.
“It’s a great time to review coverage to ensure that it’s adequate and that you are receiving all the credits you might be entitled to,” Gambill said.
Read Newsweek’s full interview with Jennifer Gambill below
Q: Auto insurance is particularly expensive in Florida. What makes it unique compared to other states in this regard?
Gambill: “Unfortunately, there’s no single reason that makes Florida unique compared to other states; instead, there’s a multitude of reasons and all of them result in increased claims dollars paid by insurance companies, which directly impacts the rates paid by policyholders.
There’s very little by way of public transportation in Florida which means drivers have no good way to get around except by car. Consider for a moment that Florida is the third most populated state in the country, and that Florida welcomed more than 140 million visitors to the state in 2024, and it’s easy to see that Florida has a lot of cars on the road all the time.
More cars mean more accidents, and more accidents lead to more lawsuits which always inflates the cost of claims. While lawsuits aren’t unique to Florida, the number is higher and auto-related lawsuits are 14 percent higher in Florida than the national average.
Severe weather during our rainy and hurricane seasons make vehicles particularly susceptible to damage from wind, flood, and hail, leading to an increase in vehicle claims. While anyone can see that a hurricane storm surge might put vehicles at risk, it doesn’t take a hurricane to cause flooding in Florida. Strong summer storms in Florida can inundate roads, streets, and parking garages, damaging vehicles with little notice.
Q: Why is it so high compared to states like New Hampshire, where the average insurance cost is $1,716?
The Florida insurance marketplace has long suffered from instability and a lack of insurance company competition with a churn of insurers that don’t understand the Florida market entering the marketplace and then leaving after a significant wind event or higher than expected claims.
With fewer insurers willing to provide insurance in Florida than in New Hampshire, there is less competition, which leads to higher premiums. Like New Hampshire, the top five insurers in the state account for the majority of the personal auto insurance market share. In New Hampshire, that market share is 60 percent. In Florida, that percentage jumps to 80 percent.
In addition to market instability, Florida has also long suffered from insurance fraud and abuse when it comes to both auto and homeowner’s insurance. Ironically, the 1971 No-Fault Law that aimed to reduce fraud and litigation costs is a major cause of auto insurance fraud in the state, with The Insurance Research Council estimating that one out of 10 no-fault claims are fraudulent and one in three are exaggerated. There have been multiple efforts to repeal the law but none have succeeded yet.
Q: How do rising car costs intersect with Florida’s already high cost of living in housing and insurance?
Rising insurance costs in Florida have a significant impact on the already high cost of living in Florida. Recent reforms have been passed that aim to reduce litigation and fraud within the insurance industry, and early indications are that these reforms are having a positive impact on insurance premiums. The five major auto insurers in the state have all announced auto insurance rate decreases. It’s hopeful that additional reforms will continue to positively shape the marketplace.
That said, it’s important for consumers to take matters into their own hands. Decreasing rates means it’s a great time to shop around for the best rate. It’s also a good time to review coverage to ensure that it’s adequate and that you are receiving all the credits you might be entitled to.
An independent agent may be useful because they represent multiple insurance companies and can obtain several quotes at once. They may also find ways to obtain additional credits by consolidating vehicles or bundling policies to reduce cost. An agent can also illustrate the savings associated with taking higher deductibles and ensure that you are correctly classified and rated. That can be very important. I can’t tell you the number of times I’ve spoken to someone where they’ve been working from home since COVID, but their auto insurance policy is rated on a 5-mile commute to the office.
link