Why car insurance rates are rising in Ohio and how to lower your bill

(WJW) — Ohio drivers may notice they’re spending more now to insure their cars.

After eight years on the rise, insurance rates among 10 large insurance companies in Ohio dropped in 2019 and 2020, mostly due to pandemic-related factors. But they went back up in 2021.

Various things are contributing to the increase — but mostly inflation, an industry representative told FOX 8. But there are also some things you can do to help bring your bill down.

How much have insurance rates increased?

Though average insurance rates among the state’s top 10 insurers declined in 2019 and 2020, they rose again in 2021, according to data provided by the Ohio Department of Insurance. Those 10 companies represent 80% of the overall market, said spokesperson Robert Denhard.

“Different factors can impact auto insurance rates, including driving behavior, driving infractions, amount of driving, vehicle type, claims activity, repair and materials costs, and medical costs,” he said.

That downward trend was brief compared to the rest of the prior 10 years, in which Ohioans saw average rates steadily rise across the board. Insurance rates nationwide rose an average of 2.64% each year between 2011 and 2018, the data shows.

The largest increase in 2021 was for Liberty Mutual policyholders, who started paying 7.5% more that year. Between 2011 and 2018, Liberty Mutual rates increased an average of 5.2% each year — the largest average increase among all the 10 aforementioned Ohio providers.

Erie Insurance Group had the lowest in that span — an average just below 0.7%.

What’s driving the increases?

Quite simply, “the cost of everything has gone up,” said Dean Fadel, president of the Ohio Insurance Institute. It’s about 6% more costly to replace a new vehicle than it was a year ago. Used cars are now also about 20% more expensive, he said.

Supply chain disruptions mean vehicles under repair spend longer in the shop waiting for parts, and their owners are spending longer driving rentals from their insurance companies.

Though pandemic lockdowns restricted travel, the car crashes that did happen were more severe. That also affects how much all auto insurance policyholders have to shell out, Fadel said.

“Despite the fact that we had a lockdown, the number of fatalities on the roads went up,” he said. “We were one of the only countries in the world to see that happen. That’s a result of more risky driving, which has equated to higher claims.

“Driving behavior has not gotten better in this country. It’s probably gotten worse.”

Insured drivers all pay into the same pot — some more and some less, all based on their individual risk factors, Fadel explained. The hope is that not everyone will have to draw from it, he said. But when those who do have higher claims, “everybody’s going to end up putting a little bit more into the pot to cover that,” he said.

How much did your insurer raise rates?

Here’s how much each of the top 10 Ohio insurance companies raised rates each year, on average, between 2011 and 2018, according to the Ohio Department of Insurance data:

Liberty Mutual 5.2%
American Family Insurance Group 3.8%
Nationwide 3.5%
Grange Insurance 3.3%
United Services Automobile Association 2.6%
Berkshire Hathaway (GEICO) 2.3%
Allstate 2%
State Farm 1.9%
Progressive 1.8%
Erie Insurance 0.7%
Source: Ohio Department of Insurance

But let’s put that into perspective. Ohio drivers have long enjoyed some of the lowest auto insurance rates in the nation, Denhard said.

According to a January report from the National Association of Insurance Commissioners, insured Ohioans spent an average of $802 on liability, collision and comprehensive policies in 2019, well below the national average of $1,070 that year. Ohio had the eleventh-lowest average rate in the U.S. that year. That’s the most recent data available from the association.

But that was up 12.3% since 2015 when Ohioans’ average insurance spend was $714. Likewise, the national average was up 16.2% from 2015, when it was $897.

The association notes it’s difficult to compare states directly since each is affected differently by things like underwriting costs, driving locations, accident rates, traffic density, auto thefts, repair costs and state laws. States may also require a coverage level. Ohio, for instance, requires:

  • $25,000 for injury or death of one person
  • $50,000 for injury or death of two or more people
  • $25,000 for property damage in an accident

How to save money on car insurance

First off — don’t text and drive, Fadel said.

“Minimizing driving incidents and infractions are important,” Denhard also said.

Fadel also recommended policyholders shop around to see if they can find a better rate elsewhere.

“Consumers should compare products from different companies and discuss their vehicle usage with an insurance agent as well as review adequate insurance protection options and premium amounts,” Denhard said.

Since the pandemic, fewer people are actually still commuting to work, and the number of miles policyholders expect to travel has a big impact on their rate, Fadel said. Those now driving less should make sure their insurance agent is aware.

“Make sure your agent is completely up-to-date in regard to your official circumstance,” he said.