2010 Ohio homeowners and auto insurance premium trends report released

FOR RELEASE: July 19, 2010

COLUMBUS – The Ohio Insurance Institute (OII) offers the following information regarding Ohio’s auto and homeowners insurance premiums to help consumers understand the current insurance environment in the Buckeye state. This report reflects the 2009 rate changes announced today by the Ohio Department of Insurance.

The OII is a trade association representing insurance companies and agent groups for the property/casualty insurance industry. Its primary objective is to help Ohioans achieve a better understanding of insurance and safety issues.

Homeowners insurance
• Based on 2007 data released by the National Association of Insurance Commissioners (NAIC) in December 2009, Ohioans pay nearly $282 less for homeowners (HO) insurance than the US average. The average HO expenditure in Ohio in 2007 was $540 compared to the US average of $822.
• According to the NAIC report, Ohio’s average homeowners insurance expenditure of $540 is the sixth lowest in the US. The five states with a lower average HO expenditure are Washington, Utah, Oregon, Wisconsin and Idaho. The average expenditure is based on the type of coverage that most Ohio homeowners purchase. Click here for homeowners insurance expenditures by state, including rankings.
• Based on 2006 data released by the NAIC in March 2009, the 2006 average HO expenditure in Ohio was $530 compared to the US average of $804. According to NAIC past reports Ohio’s 2005 average HO expenditure was $531 and in 2004 it was $523.
• The Insurance Information Institute projects the following average US HO expenditures for 2008-10:
2008   $835
2009   $854
2010   $879
• The Ohio Insurance Institute projects the following average OHIO HO expenditures for 2008-10. These are based on the ODI change history report data for 2008 and 2009. OII used a 2.9% increase to project the 2010 average Ohio expenditure based on III 2010 projections.
2008   $579
2009   $635
2010   $653
• Based on ODI rate reports, between 2005-09 the top 10 Ohio HO writers increased HO premiums an average of 3.6% annually during the five-year period.
• Ohio’s average homeowners insurance premium has risen over the past few years after a decrease of .7% in 2006.

Auto insurance
• Based on 2007 data released by the NAIC in December 2009, Ohioans pay nearly $167 less for auto insurance than the US average. The average auto insurance expenditure in Ohio in 2007 was $628 compared to the US average of $795. Ohio’s average expenditure is 11th lowest in the US. Click here for auto insurance expenditures by state, including rankings.
• The Ohio Insurance Institute projects the following average OHIO auto expenditures, based on the ODI change history report data for 2008 and 2009. 2010 projections are based on the CPI index change of 1.7% for vehicle insurance between Dec. ’09-May ’10.
2008   $632
2009   $650
2010   $661
• Ohio’s average auto premium is less now than it was eight years ago. NAIC reported Ohio’s 2003 average auto insurance expenditure was $672. Based the Ohio Department of Insurance (ODI) 2008-09 rate change reports, OII estimates that the average auto insurance expenditure for Ohioans is $661 in 2010, $11 less than in 2003.
• According to the NAIC 2006 data report released in November 2008, Ohio’s average auto insurance expenditure premium was $654; in 2005 it was $670; 2004 it was $680 and it was $672 in 2003.
• Based on ODI rate reports, between 2005-09 the top 10 Ohio auto writers averaged nearly a 0.3% premium decrease annually.

General points about Ohio insurance premiums
• Not all insurance companies experience the same level or degree of losses (known as loss exposure). The range of premium rate changes reported by various companies in any given year reflects this. For example, the Top 10 Ohio writers of auto insurance reported rate changes from –1.1% (decrease) to 8.9% in 2009, and –2% (decrease) to 2.6% in 2008, according to the ODI. The Top 10 homeowners insurers reported premium rate changes of –2.1% to 15.9% in 2009, compared to –0.5% (decrease) to 13.1% in 2008.
• Policyholders insured by the same company may also experience different premium adjustments, depending on coverage choices, personal claims history and company subsidiary.
• In September 2008, Ohio experienced the costliest natural disaster in recent history. Remnants of Hurricane Ike caused $1.255 billion in insured losses in the Buckeye state. Insurers cannot raise premiums to recoup past losses but can make determinations based on future or potential risk
• Insurers submit rate filings to the Ohio Department of Insurance with actuarial justification for any proposed rate change. The ODI, as the state’s insurance regulator, reviews such filings and can deny any premium revision that is excessive or inadequate.
• Ohio’s home and auto premiums remain affordable. Consumers benefit from the hundreds of companies providing insurance coverage in the Buckeye state. Only IL and IN have more auto insurance providers than Ohio and only IL and PA have more writers of homeowners insurance. Competition helps keep our premiums consistently lower than the US average in both home and auto.

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Resources & references
• NAIC 2007 Homeowners Report (Dec. 2009)
• Homeowners insurance expenditures by state (Insurance Information Institute)
• NAIC 2006-07 Auto Insurance Report (Dec. 2009)
• Auto insurance expenditures by state (Insurance Information Institute)
• Ohio Department of insurance 2003-09 homeowners insurance premium rate change report
• Ohio Department of insurance 2003-09 auto insurance premium rate change report
• Ohio Department of insurance news release Ohio Auto and Homeowners Insurance Rates Increase Slightly in 2009
• OII’s How to save on auto insurance
• OII’s How to save on homeowners insurance