As many of you are aware, Ohio lawmakers passed a bill in December 2012 that raised the state minimum auto insurance liability requirement. Although they have given an entire year's grace period before the change goes into effect, that grace period is ending December 22, 2013. I will explain what this means for the customer in terms of coverage and cost, and how the deadline date applies to your auto insurance policy.
Change in coverage:
Old Limits: 12.5 / 25 / 7.5
New Limits: 25 / 50 /25
What do the numbers mean?
Example: Let's suppose you are driving and run a red light, and crash into a vehicle with 2 people in it. We'll assume you are carrying the old state minimum of 12.5/25/7.5...... As a result of the accident, both persons are injured and the vehicle you hit (that's worth $5000) was totaled. One person's injuries amounted to $15,000 in medical expenses, the second person's expenses totaled $10,000.......
With 12.5/25/7.5 coverage, your policy would pay the first person $12,500, the second person $10,000, and $5000 for damage to the vehicle.
How will this increase affect rates if I'm carrying the old state minimum limits?
It depends on when your policy expires. If it expires on or before Dec. 21, 2013, you can stay grandfathered into the old state minimum rates for one more policy period. When your policy expires again in 2014, you will then be required to carry the new higher limits upon renewal.
If your policy expires/renews on or after Dec. 22, you will be required to carry the new rates right away upon renewal of your policy.
How much more will this higher coverage cost?
You may be worried that because the bodily injury part is doubling, and the property damage part is more than tripling, that the increase might become unaffordable..... However, you will be surprised to know that the increase will only be minimal in terms of cost. In most cases, the increase will only amount to an increase of roughly 10% (will vary, being higher or lower, depending on the company). So don't sweat it! For most, it will only cost pennies on the dollar more. If your policy increases much more than that solely because of the liability increase, it may be time to shop around with other auto insurance companies.
Does this new higher state minimum limit provide adequate coverage?
For a minor accident, yes. But for a major accident, definitely NO! This new increase only upgraded the coverage from very lousy to lousy. Even with the new single limits of $25,000, it is very easy to exceed that amount with only a short stay in the hospital. Anything that runs over that amount, you are liable for. That's why it's important to understand that just because the minimum coverage is going up, doesn't mean that it is now adequate. Not even close!
However, I realize that many people carry financial responsibility bonds or named operator (aka named driver) policies only as secondary coverage to satisfy an SR22 requirement. And for those who don't need the extra liability coverage because of having another policy in force with higher liability limits, I can understand why you want to stay locked into the old limits as long as you can.
What if I buy a new policy this month... Can I stay locked into the old minimum?
As long as you buy the policy on or before December 21, you can still stay with the old limits for the length of that policy. But again, unless you are using this only as a secondary policy, this is something I highly discourage for reasons mentioned above.
If you would like to get a quote for auto insurance, click on one of the two links below, and I will run your quote with the companies I carry, and find the company with the best rate. And as always, I handle all quotes personally and privately, and do not sell or share your information with anyone.
Get an Ohio Auto Insurance Quote with Lyles Insurance here if you own a vehicle
Get an Ohio Bond Insurance Quote with Lyles Insurance here if you Do Not own a vehicle
Dan Lyles is an Independent Insurance Agent serving Ohio, Indiana, Michigan, Pennsylvania, Virginia and West Virginia..