FOR RELEASE ON:  May 5, 1999
FOR MORE INFORMATION: Contact Mary Bonelli or Mitch Wilson, OII, 614-228-1593

OHIO MAINTAINS STATUS AS AFFORDABLE AUTO INSURANCE STATE

COLUMBUS—Ohioans continue to pay less than the U.S. average for auto insurance, with a state average premium that’s lower than all but 11 states. According to a study released by the National Association of Insurance Commissioners (NAIC), Ohioans paid an average of $630.71 for auto insurance in 1997, compared to the U.S. average of $798.08, which is $167.37 less than the national average.

The NAIC study compared 1997 average annual auto insurance premiums for all states and Washington DC. Ohio moved up in affordability standings compared to last year’s results. It showed that Ohio’s 1996 combined average auto insurance premium was nearly $173 below the U.S. average, with 11 states reporting lower combined average premiums. The combined average premium includes average premiums paid for liability, collision and comprehensive coverages. (Click here for premium comparisons for Ohio and the U.S. by these specific coverages in PDF format.)

The Buckeye state’s 1997 combined average premium came in 40th in comparison to other states and the District of Columbia. Ranking first or highest in the study was New Jersey with an average auto insurance premium of $1,292.76, followed by Washington DC and New York. Those with lower combined average premiums than Ohio include mostly less populated states primarily in the Midwest. Ranking 41 through 51 in the study, in order, were: Montana, Virginia, Wyoming, Nebraska, Wisconsin, South Dakota, Vermont, Idaho, North Dakota, Maine and Iowa with the lowest average combined premium of $520.76. (Click here for state-by-state comparisons in PDF format.)

Upon analyzing the results, Ohio Insurance Institute (OII) President Daniel J. Kelso noted that Ohioans continue to pay lower premiums which can be attributed, in part, to the state’s financial responsibility law.

According to the OII, most of the states with higher auto insurance premiums have compulsory auto insurance laws in place. The OII president also noted that there are often fewer insurance companies for consumers to choose from in these states because compulsory auto insurance laws often result in over-regulation.

"Ohioans are provided the added benefit of being able to choose among the hundreds of insurers that write auto insurance in the Buckeye state," he said. "I seriously doubt that such choices are available in states where auto insurance premiums average above $1,000."

According to the Ohio Department of Insurance, there are over 900 property/casualty companies licensed in the state, the majority of which offer auto insurance. Ohio’s strong insurance market combined with its stable insurance climate, creates a favorable business environment for insurers.

"Ohio’s auto insurance consumers directly benefit from the fact that premiums remain affordable because of the competition among companies vying for their business," Kelso said.

Upon analyzing the various auto insurance coverages, Kelso noted that auto liability coverage premiums continue to outpace all other coverages in terms of monetary cost increases. 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. It's the coverage Ohioans carry in order to comply with Ohio’s financial responsibility law. For this study, uninsured/underinsured motorist coverages were also included under liability insurance. Ohio’s average liability insurance premium ranks 31st in comparison to other states and Washington DC.

The Institute reports that between 1993 and 1997, liability insurance premiums rose, on average, $47.06 while collision coverage rose $29.57 and other than collision (also known as comprehensive) coverage rose $3.50. (Click here for 1993-1997 comparison coverage chart in PDF format.)

"The unpredictable nature of some of the Ohio Supreme Court's rulings has played a role in the increased cost of liability insurance coverage," said the OII president.

The NAIC study finds the Buckeye state’s average collision coverage premium ranks 35th, with its average comprehensive premium being second lowest in the country. Only Maine has a lower average comprehensive premium than Ohio. Collision covers the cost of repairing an insured’s vehicle due to an accident, while other than collision (comprehensive) coverage provides protection for the insured’s vehicle for damage caused by perils other than collision such as theft, hail or tornadoes.

The OII president cites the introduction of more safety features and stronger vehicle crash zones in the front and back of cars as factors that are keeping repair costs down as well as the 2% drop in crashes in the Buckeye state between 1996 and 1997. According to the Ohio Department of Public Safety, there were 395,113 reported crashes in 1996 and 386,852 crashes in 1997.

"Also, the direct repair programs offered by many insurers help to keep repair costs competitive," he added.

"Despite the fact that Ohio consistently ranks as one of the top states in terms of total vehicle miles driven annually and in the numbers of licensed drivers and registered vehicles on our roads, Ohioans continue to receive a good return on their auto insurance dollar," said Kelso. (Click here for charts to support this statement in PDF format.)

The OII also offers its free "Insurance Consumer Tips" brochure that includes tips to help keep auto insurance premiums down. Contact the OII at P.O. Box 816, Columbus, OH 43126; 614-228-1593 for a copy or download the tips from the OII website at 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.

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