Revised 2010 Ohio homeowners & auto insurance premium trend report

UPDATED November 29, 2010

FOR INFORMATION: Dean Fadel: 614.228.1593

Just updated: 2010 Ohio homeowners and auto insurance premium trend report

COLUMBUS – The Ohio Insurance Institute (OII) updated its Ohio auto and homeowners insurance premium trend report to help consumers understand the current insurance environment in the Buckeye state. This report reflects July’s auto and homeowners insurance 2009 rate changes released by the Ohio Department of Insurance and 2008 homeowners information released earlier this month by the National Association of Insurance Commissioners (NAIC).

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 (Updated November 2010)
NOTE: OII’s data and ranking information is based on the HO-3 policy form, the most common homeowners insurance form purchased by consumers (provides coverage for direct loss from all risks except those specifically excluded from coverage). About 80% of Ohio and US homeowners insurance is written on the HO-3 policy form. OII figures and rankings differ slightly from information released by the Ohio Department of Insurance on November 30th. While OII information is based only on the HO-3 form, the department’s includes other homeowner policy forms along with the HO-3. There is a $4 difference between ODI and OII average homeowners insurance expenditure, with rankings reflecting the difference.
• Based on 2008 data released by the National Association of Insurance Commissioners (NAIC) in November 2010, Ohioans pay $226 less for homeowners (HO) insurance than the US average. The average HO expenditure in Ohio in 2008 was $565 compared to the US average of $791.

• According to the NAIC report, Ohio’s average homeowners insurance expenditure of $565 is the seventh lowest in the US. The six states with a lower average HO expenditure are Delaware, Wisconsin, Washington, Oregon, Utah and Idaho. The average expenditure is based on the type of coverage that most Ohio homeowners purchase, an HO-3 policy form. Click here for homeowners insurance expenditures by state, including rankings.

• 2007 data released by the NAIC in December 2009 shows the average HO expenditure in Ohio was $540. Ohio’s 2006 average HO expenditure was $530. 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 2009-10:

2009   $868
2010   $890

• The Ohio Insurance Institute projects the following average OHIO HO expenditures for 2009-10. These are based on the 2008 average expenditure reported by the NAIC and ODI’s change history report data for 2009. OII used a 3% increase to estimate the 2010 average Ohio expenditure based on III projections.

2008   $565
2009   $620
2010   $639

• 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 (As of July 2010)

• 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 Insurance Information Institute projects the following average US auto insurance expenditures for 2008-10:

2008:  $816
2009   $844
2010   $878

• The Ohio Insurance Institute projects the following average OHIO auto expenditures, based on the ODI change history report data for 2008 and 2009. OII used a 4% increase to estimate the 2010 average Ohio expenditure based on III 2010 projected increases.

2008  $632
2009  $650
2010  $676

• Ohio’s average auto premium is nearly the same as it was eight years ago. NAIC reported Ohio’s 2003 average auto insurance expenditure was $672. Based on the Ohio Department of Insurance (ODI) 2008-09 rate change reports, OII estimates that the average auto insurance expenditure for Ohioans is $676 in 2010, just $4.00 more 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.

– 30 –

Resources & references
NAIC 2008 homeowners insurance report release (Nov. 2010)
• III’s Homeowners insurance expenditures by state
NAIC 2006-07 Auto Insurance Report (Dec. 2009)
• Auto insurance expenditures by state (III): www.iii.org/media/facts/statsbyissue/auto
Ohio Department of insurance 2003-09 homeowners insurance premium rate change report
Ohio Department of insurance 2003-09 auto insurance premium rate change report
July 2010 edition of this OII trend report
• OII’s how to save on auto insurance
• OII’s how to save on homeowners insurance