For release:  August 14, 2001
FOR INFORMATION:  
Mary Bonelli/Mitch Wilson:  614-228-1593
After hours:  Mary/614-443-0400; Mitch/614-868-0575

OHIO'S AUTO INSURANCE PREMIUMS REMAIN BELOW US AVERAGE

COLUMBUS-A study released in June by the National Association of Insurance Commissioners (NAIC) finds Ohioans paid an average of $646.34 for auto insurance in 1999, which is $136.80 less than the national average of $783.14.  The state's average combined premium (auto insurance that includes liability, collision and comprehensive coverages) is lower than all but ten states.

The NAIC study compared 1999 average annual auto insurance premiums for all states and Washington DC.  (Click here for Table 1, 1999 premium comparisons for Ohio and the US by specific coverage.)  Ohio slipped one spot in the affordability standings from 1998.  The Buckeye state's 1999 combined average premium came in 41st in comparison to other states and the District of Columbia.  New Jersey continues to lead the nation with an average auto insurance premium of $1,200.40, followed by Washington DC and New York.  Those with lower combined average premiums than Ohio include less populated states primarily in the Midwest.  Ranking 42 through 51, in order, were: Wyoming, Vermont, Nebraska, Virginia, South Dakota, Wisconsin, Idaho, North Dakota, Maine and Iowa, with the lowest average combined premium of $543.44.  (Click here for Table 2, state-by-state coverage comparisons.)

Upon analyzing the results, Ohio Insurance Institute (OII) President Daniel J. Kelso noted 1999 premium figures may be slightly misleading.  Auto insurance premiums have begun to rise in the past two years.

"Although the market is extremely competitive here, national premium increases averaged 1.5% last year," said Kelso.  "This year, the average increase may be in the 5% range.  Business owners might even experience double-digit increases in their commercial auto insurance premiums."

This is not to say that there aren't plenty of options in Ohio, which could mean that although increases are inevitable, they aren't insurmountable.

According to the Institute, there are factors working in favor of Ohio auto insurance consumers.  AM Best data for 1999 (latest information available) shows that only one state, Illinois, has more auto insurance providers than Ohio.  In 1999, there were 611 companies licensed to write auto insurance in the Buckeye state, with Ohio's total auto premium volume ranking ninth in the nation. Ohio's strong insurance market, combined with its stable regulatory climate, creates a favorable business environment for insurers.

"With such a competitive insurance market, increases may not be as severe as in other parts of the country," said Kelso.

The OII reports that most states with higher auto insurance premiums have compulsory auto insurance laws.  Ohio maintains a financial responsibility (FR) law, which provides other options besides insurance to comply with state law.  Most Ohio drivers comply with the law through auto insurance.  The OII president also noted that there are often fewer insurers for consumers to choose from in pure compulsory insurance states.  Such laws often result in over-regulation that can negatively affect the writing of new business.

That's not to say that the climate is perfect.  According to Kelso, the Ohio Supreme Court has taken numerous liberties in its interpretation of Ohio statute regarding auto insurance coverages by expanding them beyond the intent of the policy.

"Through a series of 4-3 decisions, the Ohio Supreme Court has taken the initiative of rewriting Ohio's uninsured/underinsured (UM/UIM) motorists insurance statute to a point that the only solution has been through remedies passed by the Ohio General Assembly." 

The most recent example was the passage of SB 97, the UM/UIM Availability Act, in late June.  The bill paves the way to offering all auto insurance coverages in the same manner, eliminating statutory language that has been continually used by the Supreme Court as its hook in rendering several anti-consumer, anti-business decisions.  The Governor signed the bill in late July and will become effective in late October.

Upon analyzing trends in the various auto insurance coverage lines, Kelso said he doesn't expect Ohio's auto liability premiums to remain as favorable in future NAIC reports.  Ohio's 1999 average liability insurance premium ranks 30th in comparison to other states and Washington DC, with an average premium of about $342, over $61 below the US average.  Liability insurance provides protection against at-fault injuries to others, damage to their vehicles and other property, and lawsuits commonly associated with personal injury attorneys. 

"We're expecting Ohio's liability coverage premiums to increase in the coming years due to Ohio Supreme Court decisions that have continually expanded this coverage," said the OII president.

In the NAIC study, uninsured/underinsured motorists coverage was included under liability insurance.  The Ohio Supreme Court's Scott-Pontzer decision in July 1999 expanded UM coverage to apply to relatives of employees who can collect under the employer's commercial auto policy when they are driving a personally owned vehicle, even if they are not on company-related business at the time of the crash.  The original intent of this coverage was to cover employees driving company-insured vehicles while on company business.  UM/UIM coverage was further expanded by the court's December 2000 Linko decision which basically voided all UM/UIM rejection forms used by Ohio insurers, thus providing coverage to Ohio policyholders regardless of whether or not they paid for it.  These two rulings are estimated to cause an additional $1.5 billion in claims.

The Institute reports that between 1995-1999, Ohio's liability insurance premiums rose 4.4% compared to the national average decrease of 5.9%.  Collision coverage in Ohio rose 19.0% compared to the US average of 16.9%, and Ohio's comprehensive coverage increased 3.3% while the average US increase was 9.0%. (Click here for Table 3, Ohio's five-year average premiums by coverage.)

"Despite the fact that Ohio consistently ranks as one of the top states in terms of total vehicle miles driven annually and in the number of licensed drivers and registered vehicles on our roads, we've continued to receive a good return on our auto insurance dollar," said Kelso.  (Click here for related charts.)

To help keep auto insurance premiums down, contact the OII at P.O. Box 816, Columbus, OH 43216; 614-228-1593 for a copy of "Insurance Consumer Tips" or download the brochure from www.ohioinsurance.org.

The Ohio Insurance Institute is a trade and public information association representing insurance companies and agent groups for the property/casualty insurance industry.  A primary objective of the OII is to help Ohioans achieve a better understanding of insurance and related safety issues.

For additional information, click on the online version of 2001 Ohio Insurance Facts located on the OII homepage at www.ohioinsurance.org. Then select Chapter 1, sections titled 2000 Auto Insurance Premiums in Selected Ohio Cities and 1998 US Auto Insurance Premiums by State.  Cost saving tips can be found in the Chapter 1 section titled How to Save Money on Auto Insurance.