Florida drivers pay an average of $1,043 a year on auto insurance, ranking our premiums as the fifth most expensive in the U.S., just $97 shy of the costliest premiums paid by drivers in Washington, D.C. (For the lowest auto insurance premiums, you'd have to move to North Dakota, where your annual auto insurance premiums would drop by more than half.)

A closer look at how this annual expenditure is divvied up shows that more than two-thirds of the cost goes to cover liabilities associated with automobile claims. Florida outranks every other state, except New Jersey, in the portion of annual premiums covering liability-related costs. The National Association of Insurance Commissioners (NAIC) calculates average expenditures under the assumption that all insured vehicles carry liability coverage but not necessarily collision or comprehensive coverage. The average annual expenditure calculation measures what consumers actually spend on insurance for each vehicle, which does not match the sum of liability, collision and comprehensive because not all policyholders purchase all three coverages.

Here's how the NAIC breaks down the costs in Florida:

Automobile rates are going up nationally as well. The U.S. Department of Labor's 2009 year-end report states that automobile insurance rates rose 4.5 percent. The consumer price index points to rising costs of hospital, physician, and legal fees. Hospital service prices increased nationally 6.4 percent in 2009, and fees for physician services were up 3 percent; legal fees climbed 2.7 percent. Then, there is the cost of motor vehicle body work — up 3.2 percent last year.

Florida's urban population and traffic density also drive up premiums. More people and more cars on fast-moving, big city highways equal more accidents. Things really start to add up when you factor in the increasing number of uninsured drivers and rampant fraud. The Insurance Research Council estimates that about one in four drivers in Florida is uninsured and makes a corollary between higher unemployment and uninsured drivers.

Florida's challenges with rising auto insurance rates are compounded by no-fault auto insurance laws that breed organized groups seeking a steady revenue stream from staging automobile accidents and submitting fraudulent and inflated medical claims. The National Insurance Crime Bureau (NICB) reports that the ratio of staged accidents to overall bodily injury claims is increasing — and can you guess which state tops the list for the most questionable claims related to staged accidents? Yes, another dubious distinction for Florida. According to the NICB, Florida accounted for 27.6 percent of all the staged/caused accidents in the U.S. for the first half of last year, with five Florida metro areas ranked by NICB as Top Ten loss cities: Tampa, Orlando, Miami, West Palm Beach, and Hialeah.

Despite all that is wrong with the Florida auto insurance market, consumers have coverage options, and choices remain available and affordable. Plus, risky drivers pay their own way, not taxpayers. If you want to contrast the private and public markets for auto and property insurance, consider this:

A.M. Best reports there were just 21 policies in the shared market for auto insurance in 2008. In the shared market for property insurance, Citizens Property Insurance Corp. had 1,026,597 on the books as of January 2010. Health may have a relative value, like so many other things — and relative to property insurance, auto insurance has a better, albeit somewhat debilitated, prognosis.

Lynne McChristian is the Florida representative for the Insurance Information Institute. She may be contacted at 813-480-6446, [email protected]. Also, see www.InsuringFlorida.org for her insurance blog, “Straight Talk.”