Car insurance costs increase for minimum coverage
Drivers with the minimum coverage for auto insurance faced yet another rising bill just before the new year rang in: Minimums that are more than double what they have been for decades.
“The minimums had been the same for 40 to 50 years,” said John Reed, a local AmeriState Insurance Agency agent. “It was time that it changed because the minimum wouldn’t cover the expenses of an accident.”
The Ohio Insurance Institute (OII) reported that previous minimum limits had been in effect since 1969. While the new minimums began on Dec. 22, the law took effect in March, leaving a nine-month grace period before the minimums rose. Drivers do not have to comply with the new minimums until their first policy renewal.
Reed said drivers will see an increase on their bills from anywhere between $5 and $15 a month on average, depending on the insurance company they use.
“The property damage part did more than double,” he said. “It went from $7,500 to $25,000. It comes closer to replacing most vehicles out on the road.”
According to the OII, the minimum increases came about because of Ohio House Bill 278.
The bill, which passed in December 2012, increases the minimum of bodily injury or death of one person per accident from $12,500 to $25,000, the bodily injury or death of multiple persons in one accident from $25,000 to $50,000 and property damage per accident from $7,500 to $25,000.
The bill was sponsored by Rep. Gerald Stebelton, R-Lancaster, and Rep. Mark Okey, D-Carrollton. The bill passed by a vote of 84-4 in the House and unanimously in the Senate.
It gained support almost immediately from Ohio Rep. Andy Thompson, R-Marietta.
“It was well past time to update the rates to have them better reflect the costs of liability and repairs and those kinds of things associated with an accident,” he said. “It’s well overdue in terms of updating those levels of insurance.”
Ohio Rep. Bob Hackett, R-London, is chairman of the Ohio House Insurance Committee and was one of the co-sponsors of the bill.
Hackett said Ohio had one of the lowest amounts for coverage, right in line with Florida and Louisiana.
“We’re trying to protect other policy holders,” he said, adding that many but not all insured drivers are covered for uninsured and underinsured drivers.
Hackett said this isn’t the first time the bill had been considered.
“When the economy was bad, it was my first term,” he said. “I talked (other legislators) into holding off on the bill until the economy was better. I wanted to let the economy get a little better before we brought things in line.”
When the economy started to improve, the bill was reintroduced.
“We understand (about the increase), but we also have to be concerned about our other drivers…What else hasn’t had an increase in 43 years?” Hackett said
He added that it took many years to really get the bill right from the time it was originally introduced to when it passed.
“Just the fact that it took several years, we wanted to make sure we were doing the right thing for Ohio,” Hackett said.
He added that Ohio falls in line with what most other states have as minimum requirements.
Neighboring states’ minimums include: West Virginia at $20,000 for one injury/death, $40,000 for multiple injuries/deaths and $10,000 for property damage; and Pennsylvania at $15,000 for one injury/death, $30,000 for multiple injuries/deaths and $5,000 for property damage. Some states with higher minimums include Alaska at $50,000; $100,000 and $25,000 and Wisconsin at $50,000; $100,000 and $55,000.
Carol Mitchell, 73, of Marietta, said she hadn’t heard about the increase.
“I don’t think it will (affect us),” she said. “We don’t just carry the minimum.”
Fellow Marietta resident, Bill Chamberlin, 69, said insurance was just one of many things increasing in price.
“I don’t know what to say about that ordeal,” he said. “Everything’s going up…What’s wrong with what we had?”
Eddie Ruble, 56, of Marietta, said that through AARP, his insurance usually stays about the same. He said he felt people paid enough money for insurance already.
“I think it’s high enough already,” he said. “I have full coverage…(but) I think everything’s high enough.”
Though the increase appears to be unwanted by some, Reed said it could have been higher.
“It really didn’t go up as much as we expected,” he said.
Maureen Kertes, 24, of Reno, said even though the bill could have been higher, it’ll still end up being pricey.
“(Five dollars to $15) is going to be high in the long run,” she said.
The OII estimated that there are 5.1 percent, or about 400,000, Ohioans who carry the minimum for auto insurance, who in turn will be affected by the minimum increase.