Is Ohio raising the state minimum auto insurance liability requirement?
Yes. For the first time since 1969, Ohio has increased it's state minimum limits for auto insurance. The law was passed last month and will go into effect in March of this year. However, there is a nine month grace period attached onto that, which extends it to December 22, 2013.
How much will state minimum liability coverage increase?
As it stands now with the current state minimum, if you were at fault in an accident and caused injury, the most the policy would pay in liability to any single person is $12,500 and $25,000 total for multiple injuries. The most the current state minimum liability will pay if you cause property damage is $7500.
When the new limits go into effect, the amount for bodily injury will double to $25,000 & $50,000. The new minimum limit for property damage will more than triple to $25,000.
With higher required coverage limits, will my insurance rates skyrocket?
For most people, no. Although rates will go up slightly because of the higher coverage, one thing to remember is that liability coverage is NOT unit priced (meaning that if one unit costs $1 then 2 units would cost $2). Liability coverage doesn't work that way. For example, If one unit costs $1, two units may only cost between $1.10-1.25.
Every case is different, but of those who only have state minimum coverage now, the vast majority of you will see a 10% increase or less on regular auto insurance policies. Those of you who have Ohio financial responsibility bond may pay a little higher, but not much.
The Bottom Line is.... Don't sweat it! The increase won't be nearly as bad as you think.
When will insurance companies start raising the premium on my policy?
Right now, it's just too early to tell. The law was only passed last month, and Ohio auto insurance companies haven't had to deal with this in a very long time. I have heard from a few regional sales managers of the companies I represent. Right now, most companies it seems are still coming up with a strategy of how they are going to handle this new increase. As soon as I get some new info, I will pass it along here.
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Dan Lyles is an Independent Insurance Agent serving Ohio, Indiana, Michigan, Pennsylvania, Virginia and West Virginia..