Ohio Insurance Market Update:  Rising Premiums and How to Mitigate Costs

Ohio Insurance Market Update: Rising Premiums and How to Mitigate Costs

August 01, 2023

As you may be aware, the insurance market in Ohio is currently experiencing rising premiums, which can be a cause for concern. We understand that insurance can be a complex and confusing topic, which is why we want to educate you on the current state of the insurance market, why premiums are on the rise, and what can be done to keep those costs lower.

In recent years, insurance premiums have been increasing across the board, affecting everything from auto, home, and commercial property and liability. Below, we have outlined some of the most relevant factors contributing to insurance carriers reassessing their pricing models and adjusting premiums.

What Factors Contribute to Increased Insurance Rates in Ohio?

Wildfire Mapping: While Ohio may not face the same wildfire risks as other states, factors such as climate change, increased development, and poor fire management in different areas of the country are significantly impacting insurance premiums nationwide. Insurers are pricing their policies accordingly based on their understanding of these risks.

Labor Shortages: The US is currently experiencing a significant labor shortage across many industries, including Ohio. This shortage is having a profound impact on insurance premiums. Factors such as the COVID-19 pandemic, which led to job losses and slow workforce re-entry, and an increase in retirements among older workers have contributed to this shortage. Industries like manufacturing, construction, and transportation in Ohio are experiencing labor shortages, leading to higher production costs and subsequently higher claim costs. These increased costs are being passed on to consumers in the form of higher insurance premiums.

State Restrictions: While Ohio may not have the same strict regulations as states like California and Florida, it's important to note that restrictions and regulations can impact insurance premiums nationwide. Changes in regulations regarding construction and fire-resistant materials in other states have increased the cost of rebuilding homes damaged by wildfires. These increased costs have led to some carriers stopping sales or leaving certain markets. Nationwide has recently closed all new sales in the state of Ohio. 

Tighter Underwriting: Underwriting standards have become stricter across the insurance industry, making it more challenging to place policies in preferred markets. Insurance companies are facing challenges due to increased loss frequency and higher claim costs than anticipated. As a result, they have less capital available to invest in new business and are more likely to charge higher premiums to cover their increased costs.

How Can I Reduce My Insurance Payments if I Live in Ohio?

We are pleased to share several recommendations with you and your family that may help lower your monthly insurance bills in Ohio. By taking these actions, you can potentially reduce your insurance costs without sacrificing the coverage you need.

Bundling Policies: Consider bundling multiple policies with the same carrier, as this can often lead to discounts on all policies. Some carriers offer discounts if you add a life insurance policy or other lines of business.

Explore Discounts: Many carriers offer discount opportunities, so please explore what may be available for you in Ohio. Adding security systems to your home is a great example, as some carriers may lower your monthly home premium for safety upgrades. Bundling insurance policies under one carrier is another common example.

Increasing Your Deductibles: Raising your deductibles can help you save money on your monthly insurance premiums. By increasing your deductible, you can potentially reduce your overall costs. However, remember to weigh the pros and cons before making any changes to your policy, as this can also increase your out-of-pocket expenses in the event of a claim.

Safe Driving Telematic Programs: Many insurance companies now offer safe driving telematic programs that track your driving habits using technology. By participating in these programs and demonstrating safe driving habits, you may be eligible for discounts on your insurance premiums in Ohio.

Tenure with a Carrier: If you have been with your insurance carrier for a long time, you may be eligible for loyalty discounts. Many insurance companies offer discounts to customers who have been with them for a certain number of years. These discounts can help you save money on your insurance premiums over time.

Absorbing Small Claims: If you have a minor accident or make a small claim on your insurance policy, consider absorbing the cost yourself rather than filing a claim with your insurance company. Filing a claim can cause your insurance premiums to go up, and the increase may be more than the cost of the claim itself. If you can afford to pay for the damages out of pocket, it may be a better financial decision to do so.