Good News!
According to the Ohio Insurance Institute, Ohio homeowners insurance rates are $274 less than the national average and auto insurance rates in Ohio are $163 less than the national average.

While Ohio insurance consumers enjoy rates that are lower than the national average, the news might not be all good.

The insurance market historically fluctuates between periods of declining rates (insurance lingo calls this a soft market) and periods where rates steadily increase (known as a hard market). It’s no secret, the insurance industry as a whole has been in a soft market for the past few years. Many insurance consumers have enjoyed reductions in their premium amounts for 3, 4 or even 5 consecutive years.

The Market is Changing
Insurance companies have continued to reduce their rates in an effort to increase their market share. Some have been successful in this endeavor, others have not. But as an industry, the premiums collected have not been adequate to pay for the losses and expenses of the insurance companies. As this trend continues, the insurance market gets closer and closer to a period of increasing rates (the hard market).

In the meantime, as insurance companies continue to reduce the amount of premium dollars they collect while maintaining or even increasing the amount they’re paying for claims, their required surplus is quickly depleting. Insurance companies are left with few options:

  • Begin increasing premiums to meet surplus requirements and pay claims
  • Find ways to reduce the amount paid for claims
  • Continue operations as usual and face bankruptcy

While none of these options are particularly appealing to consumers, most people that purchase insurance expect to be reimbursed for a covered claim. Insurance companies that try to deny claims, offer an unfair settlement or go bankrupt don’t help anyone.

In many ways, buying insurance is similar to buying a new car, house or a big screen T.V… you get what you pay for. If an insurance company keeps its premiums extremely low because they find ways to reduce, or even eliminate payments for legitimate claims, are you going to be happy if you have a claim with this type of company? It’s a good idea to keep an eye on companies charging premiums that seem too good to be true. Generally, these great rates won’t last (they could increase drastically in 6 months or a year) or even worse, if you happen to have a claim, the insurance company might not be around to pay it.

For tips on protecting your assets, visit our Downloads or contact one of our licensed advisors.