Ohio Homeowners Premiums 2012


Ohio Homeowner Premiums

While premiums for auto insurance in Ohio are stable, that’s far from the reality in the  homeowner’s insurance marketplace.  You may not believe it, but companies writing Ohio homeowners insurance doing business in Ohio have not made money writing homeowners insurance for several years!  While no one feels sorry for them,  they’ve been increasing premiums steadily for 4 years, and are now taking other actions in an effort to return to profitability.

Hurricane Ike cost insurance companies over $1,200,000,000 (yes billion) in the Buckeye state alone in 2008!   Hurricanes were not one of the considerations actuaries used when determining pricing for property in Ohio, but they are now.  The six biggest storms in Ohio in 2011 caused nearly $600,000,000 in insured losses, continuing a trend of damaging wind and hail storms, well above the norm, that started in 2006.  As you know, insurance companies are in business to make money, and they’ve been  raising rates and becoming more selective in who they insure.  Since 2007, homeowner premiums have gone up an average of 38%, yet that’s not been enough for the companies to make money.  The average rate increase in 2009 among the top ten companies in the state (based on premium) was  9.7%, in 2010 it was 8.7%, and in 2011 an even 10%.  In 2012, 10% – 16% is the norm, and we’ve heard of a few companies who are getting increases over 20%.

This has been an especially difficult time for insurance companies with a heavy concentration of business in Ohio.  They know they need larger rate increases than they are getting, but can’t raise them too much for fear they’ll lose market share.  For the first time in my 25 years in the business, I’m seeing insurance companies impose minimum deductibles, and offer “actual cash value” settlements for roof claims.  Most companies have a quick trigger and will want to non-renew homeowners who make more than one claim in a three or five year period.  This is not a hard and fast rule, and all circumstances are different, so please call us if you have any questions or concerns.  We have many clients who had their first ever (or first in 10 plus years) homeowner claim in 2011, due to the storms.  If you are one of them, please consider raising your deductible to as high as you can reasonably afford to.  Our advice, especially after a recent claim, is to not submit another claim unless it’s substantial.  There are a number of things we can do to help keep your homeowner premium as reasonable as possible.  We can ask your insurance company to re-run your insurance score (see our article on this topic) and if it has improved, your premium will be reduced.  We can also calculate (based on the insurer’s software) the replacement value being used to rebuild your house, and possibly reduce it, if warranted.  Remember though, that the “market value” of your house has no bearing on how much money it would cost to rebuild your home.