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Ohio Drivers Face Higher Minimum Insurance Coverage
December 30, 2013 - Ohio drivers face higher minimum insurance coverage
Roughly 5 percent of Ohio’s insured drivers are estimated to carry the minimum levels of auto insurance.
Ohio drivers who carry the minimum amount of insurance will have to boost their coverage the next time they renew their policies.
A state law that went into effect this week doubles the state minimum levels of coverage that drivers must carry — to $25,000 per person, $50,000 for a multiperson accident and $25,000 for property damage. It is the first increase since 1969.
The Ohio Insurance Institute estimates that about 400,000 Ohioans — roughly 5 percent of the state’s insured drivers — carry the minimum levels.
“It’s a public-policy debate, and the legislature has weighed in and made the changes, and we’ll go with the rules,” said Ron Davies, CEO of Columbus-based SafeAuto.
SafeAuto is no stranger to dealing with changes in laws covering minimum levels of auto insurance.
The insurer, which has about 50,000 customers in Ohio, also operates in other states that make changes from time to time.
“Our book of business is vastly focused on minimum limits,” Davies said. “We are more affected than other carriers in the marketplace. (But) our direct competitors are in the same boat.”
For drivers who carry minimum coverage, the new minimums don’t go into effect until their current policies expire, meaning that if someone bought a six-month policy in October, for example, he or she won’t have to adhere to the new minimums until it expires next year.
Exactly how much rates will go up for those drivers is hard to say, insurance companies say. Determining rates is based on a set of factors, among them the driver’s age, driving record, vehicle type, location of residence and credit record.
The sponsor of the bill, state Rep. Gerald L. Stebelton, R-Lancaster, estimated at the time it was passed a year ago that the cost of coverage for those who carry minimum levels probably would increase by a few dollars a month.
Even though it has been a long time since Ohio has raised the minimums, an increase in policy costs comes at a difficult time for many of the affected drivers, Davies said. “Certainly, the economic segment of customers that we serve has had a tough time during the recession,” he said.
One concern is that the law will raise prices enough that more drivers will skip insurance.
The state’s program of randomly checking drivers for coverage has found that about 11 percent typically lack insurance, but Davies said it is hard to tell at any time how many drivers lack coverage.
Industry officials say Ohio’s competitive market for insurance coverage gives drivers options and keeps rates among the lowest in the country while providing the drivers with more coverage.
“The new state mandate will provide additional protection to Ohio drivers and their passengers injured in an accident,” said Jeff Sibel, spokesman for Progressive, an insurer based near Cleveland.
“The majority of our customers carry higher limits than those mandated and will not have to make any changes to their policies,” he said. “The policies that are updated to meet the new requirements most likely will see an increase in their premium and will be more financially responsible for accidents they cause.”