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.

The one event that triggers people to shop for auto insurance, more than any other,  is when their teenager is approaching driving age.  We know they are expensive to insure, and want to know how much the premium increase will be.  There is a lot to learn about teenager insurance so that you can make an informed decision.  Other reasons that trigger people to shop their auto insurance include poor claim service (unsatisfied it wasn’t paid) and unsatisfactory service from their agent.

Shopping your auto insurance doesn’t have to be hard or time consuming.  You can get several quotes from leading insurers, right from this site.  Independent agents can shop your insurance for you, and captive agents  will get you a quote from the company they represent.  You should have your current policy, along with dates of birth, and drivers license numbers handy, as this is all the information you’ll need to obtain an auto insurance quote.

A client walked into my office and says “everyone in my neighborhood is getting a new roof”.  This is not uncommon to hear, after a hail storm hits an area.  I didn’t think the storm hit his part of town and told him so.  Oh yes it did, and he started naming people that were getting new roofs put on their house.  He wanted a new roof also, and wanted to file a claim, and hear about the next step.  I told him we could file a claim, and that the insurance company would come out, look at the roof to determine damage, and if it was damage by hail, ask him to get estimates.

I assumed a roofer in the neighborhood knocked on his door to tell him he could have hail damage, and that he’d be happy to check it out for him.  Although most roofing contractors are honest people, I’ve never heard of a roofer climb on a roof and say that there’s no damage.  I asked if he had siding, and he said yes, it was vinyl, but he hadn’t noticed any damage to it.  I asked to see the estimate from the roofer, and he said he didn’t have one yet.  “Let’s just turn it in, he said, because everyone knows we had a hail storm and I can get an estimate for the adjuster later”.  I explained that the roofer and adjuster sometimes disagree on whether or not damage has occurred, but that an adjuster would definately look at his roof.  ”How is everybody getting a new roof”, he asked for the second or third time.  He didn’t think a claims adjuster would actually come to his house and inspect the roof.  Then he admitted that two roofers had gone on his roof and told him he had no damage!  While I didn’t tell him he that he was asking me to help him commit insurance fraud by turning in a claim, I told him that he had no claim.  “Well, I don’t know how everybody else in my neighborhood is getting a new roof”, he said again.

I drove down his street, and was not surprised that out of 100 or so homes, only one was getting a new roof put on.  That was undoubtedly due to it being old and needing replaced.  I then drove by my clients house, and guess what?  His house is for sale, and he needs a new roof.  There may be Ohio insurance companies that don’t have local adjusters that will pay a claim without inspecting the roof, but I don’t know of any.  Think twice before trying to get something for nothing.

Usually, a claim starts innocently enough, and when it’s done, the homeowner has a new roof, and the insurance company has spent thousands of dollars.  Damage caused by hail is easy to spot on a car or truck but determining damage on a roof isn’t so easy.  If you have physical damage coverage on your auto policy, you’re probably going to get the damage paid for, assuming it’s over your deductible.  Most people have a lower, or at least the same, deductible for comprehensive as they do collision and damage to your vehicle caused by hail is a comprehensive claim.  Most Ohio insurance companies don’t penalize you at all, or as much for a “comp” claim as they do a collision claim, with the thinking being that the damage is out of your control.

We often hear, “a lot of my neighbors are getting a new roof because of the hail storm, and I want to see if my roof is damaged”.  Ohio insurance companies know, in general where the hail came down and will inspect your roof to determine damage.  Many people have already been contacted by a roofing contractor who is happy to give his opinion.  I’ve seen several cases where the adjuster and roofer disagreee on whether or not damage occurred.  Just because hail hit your roof, doesn’t necessarily mean that it damaged your roof.  While insurance companies are in the business to make money, if there is damage, they will pay the cost to repair the damage, and if the damage is widespread, replace the roof.  Check your policy to make sure you have replacement cost coverage, because if you don’t, you’ll share in the cost to fix the damage.

Most Ohio insurance companies have exclusions for certain breeds of dogs, that is, they won’t pay if that breed bites someone.  Even if you acquire a dog that is on the “banned list” after your policy is taken out, you will not have liability coverage.  You are responsible for the actions of your dog, or other pet in Ohio, regardless of whether or not you have liability insurance.  Any dog can be vicious, but many insurance companies in Ohio have the pit bull (including staffordshire bull terrier), akita, chow, doberman pinscher, presa canaril, rottweiler, and wolf hybrid on their banned list.  

If you have a bull, for example, (or get one after the policy is in place) and that breed is on the “banned dog list”, and it bites your neighbor, and you get sued, your insurance company will not defend you or pay for any injury caused by the bite.  

If you’re driving and hit an exotic animal that causes damage to your car, you may have insurance coverage that will pay to fix the damage.  Ohio auto insurance does not require you to carry full coverage, but if you have comprehensive coverage the cost to fix your car or truck will be paid by your insurance company, minus your deductible.

Independent insurance agents and brokers represent many different Ohio life insurance companies, so you’ll get more than one quote by contacting them.  One such broker, licensed in Ohio is the summit insurance agency.  There are also agents, known as captives, that represent only one life insurance company.

The internet has made it easy to get “ball park” quotes for life insurance, based on the information you enter.  These websites that quote and sell the policies are actually licensed insurance agents and earn a commision.  The only way to avoid having part of your premium go to an agent is to buy direct from the insurer, and the vast majority of life insurance companies in Ohio use agents and brokers to distribute their policies.  Similar to direct-to-consumer auto insurers, there are costs for these life companies, not the least of which is advertising and the increased staff they employ to quote and sign up new policies.

Premiums can vary by hundreds of dollars each year for Ohio life insurance and it’s in your best interest to get several insurance proposals.  This way, you can feel confident that you’re  getting an accurate representation of what the marketplace in Ohio has to offer.

Because of an unusually large number of storms (including Hurricane Ike) the last five years, premiums for homeowners and building owners in Ohio have been increasing.  We think that trend will continue for at least the next two years.  Auto insurance premiums have been stable and we don’t see that changing.  People have been driving less, and cars are safer, both of which  leads to fewer accidents.

There are signs that commercial insurance premiums are firming, with most carriers attempting to raise prices slightly.  There is still a lot of competition, and for businesses with an outstanding claims history, there are plenty of companies that will offer favorable premiums.  Ohio health insurance premiums continue to increase every year and it’s difficult to predict what the future holds here, as this is a political hot button and changes to the system may be made.

There are thousands of insurance companies licensed to do business in Ohio, and we want to help individuals, families and business owners make informed buying decisions.  Let us know if there’s a topic you’d like us to write about and feel free to bookmark us.  Thanks for visiting!