Florida considers putting an end to some fees that make auto insurance coverage so expensive
Florida is home to some of the most expensive auto insurance coverage in the U.S. This is partly due to the state’s no-fault auto insurance laws and the fees associated with coverage. The regulations governing auto insurance in the state have made fraud very prevalent, which has also contributed to the increasingly expensive nature of coverage. This week, Florida lawmakers have been working on a plan to give the state’s drivers some respite from the fees that they are required to pay in accordance with the state’s auto insurance regulations.
Proposal seeks to end tax break for insurers
The state’s Senate is considering a proposal to repeal a tax break that has been offered to the insurance industry in Florida for the past several decades. The tax break in question was established in 1987 and provides insurers with a financial incentive to continue doing business in Florida. The tax break accounts for approximately $220 million in yearly revenue. Lawmakers argue that insurance companies have managed perfectly well, financial speaking, without the support of the tax break, suggesting that this money could be more appropriately enjoyed by consumers.
Vehicle registration fee may be lowered
The senate is also considering a proposal t significantly reduce the fees associated with vehicle registration. Both vehicle registration and the tax break awarded to the insurance industry have imposed sizeable fees on consumers throughout the state. Lawmakers believe that the auto insurance industry is stable enough to exist without a tax break and that consumers should be freed from the fees that they face on their coverage.
Auto insurance companies balk at abolition of tax break
The auto insurance sectors is somewhat opposed to this endeavor, claiming that the tax breaks are more necessary now than ever due to the rampant fraud that is being seen throughout Florida. Given Florida status as a risky market due to its exposure to powerful storms, auto insurance companies suggest that the tax break could put many companies undue financial risk. Senator Joe Negron, one of the primary supporters of these proposals, suggests that two of the top auto insurance companies in the state routinely produce billions of dollars in revenue each year, more than enough to cover the potential risks associated with doing business in the state.