Will my Ohio SR22 Bond go up when the new state minimum auto insurance liability requirements go up?

This is a question that I've been getting a lot lately. The answer depends on what type of policy you currently have (in other words, what type of policy the SR22 filing is attached to) and more specifically, the amount of liability coverage you are carrying. If you are only carrying the current state minimum limits, then yes, your rates will go up because your level of coverage will increase. Here's how it breaks down:


     Current Minimum Requirement:

• Liability bodily injury coverage pays up to $12,500 for any one person injured.
• Liability bodily injury coverage pays up to $25,000 total for all persons who are injured.
• Liability property damage coverage pays up to $7500.

     New Minimum Requirement (effective Dec. 22, 2013):

• Liability bodily injury coverage pays up to $25,000 for any one person injured.
• Liability bodily injury coverage pays up to $50,000 total for all persons who are injured.
• Liability property damage coverage pays up to $25,000.

      
     So with the new limits doubling bodily injury coverage, and more than tripling property damage coverage, you might think that rates will skyrocket..... However, you might be very surprised to find out that even with the new increase in coverage, your rate won't increase by nearly as much as you think.... Not even close in most cases!


     
     One thing you need to understand about liability coverage: Auto insurance liability coverage is non-unit priced. By being non-unit priced, I mean that double the coverage does NOT equal double the price. Depending on what other coverages you have, going from the old state minimum coverage to the new state minimum will only be an increase in the range of 5-25% for most drivers.


     Who will be affected by the increase?
Most people who carry regular auto insurance already have higher than the old state minimum limits, so it won't affect your rate unless you chose to carry liability coverage that is less than the new state minimum.
Financial Responsibility Bonds, however, will see an increase because the bonds only cover the old state minimum limits. So they will need to be adjusted upwards at the new limits.
With a Named Operator (non-owners) policy or a Broad Form Named Driver policy, like regular auto insurance, it depends on what auto liability coverage you chose. As long as you're at the new state minimum or higher, you're good to go.


    So What happens before and after December 22, 2013?
(this is assuming that you have less liability coverage than what the new state minimum requirements will be)
       
       If you already have auto insurance:
      If you choose to do so,  you are locked into the old state minimum limits until the policy is up for renewal. If your policy renews before December 22, you can lock yourself in for another policy term at the old rate. Then once December 22 or later passes, and your policy is up for renewal, at that point you have to take the higher coverage.

      
       If you currently do not have auto insurance: 
      As long as you take out a policy on December 21 or sooner, you can lock yourself into the old state minimum limits for as long as the policy period lasts. Some policies for auto insurance go six months, some go 12. Either way, you are locked into the old rate until the policy is up for renewal as long as you started the policy effective prior to December 22. If you wait until December 22 or later to buy a new policy, then you have to take the new state minimum limits.

  Three more points:

• As I've mentioned before in earlier blog posts, I think that state minimum auto insurance limits are garbage coverage!  Even at the new state minimum limits, it will only protect you in minor accidents. It will not protect you adequately in major accidents.  It is very easy for an injured person to rack up $25,000 in medical bills real quick!  Just a two or three day stay in the hospital can exceed that. I can't stress this enough. State minimum auto insurance liability limits are inadequate for major accidents. You've been warned! That's all I have to say about that.

• Another thing to keep in mind is that while the conditions I've listed above are simply what the state mandates, that doesn't mean individual auto insurance companies have to follow the state mandated minimum guidelines. They can be more proactive if they want.  For example, if you're buying a new policy, some companies may require you to go ahead and take the new state minimum limits prior to when they're required to. That is their choice. These are just the minimum deadlines mandated by state law.

• Financial Responsibility Bonds are still for the most part only being offered at the old state minimum limits at this time. But most auto insurance companies will very soon be offering the new state minimum levels for those who want higher coverage prior to when it's required.

     Summary: This change has been long overdue. In fact, the old state minimum requirements were set in the late 1960's. Ohio is just now catching up to par with most other states. Companies are just now figuring out how they are planning to adjust to the new higher limits. Some companies will be more lenient than others as far as charging for higher coverages. So if you see a dramatic spike in your rates above what is reasonable, you may want to shop around for a better deal.


     To get an Ohio SR22 Quote, click on one of the links below. And as always, I handle all quotes personally and privately.



Get an SR22 Quote with Lyles Insurance here if you own a vehicle


Get an SR22 Quote with Lyles Insurance here if you Don't own a vehicle


Call me for a Quote





​
Related Blog Articles:

​Video: Ohio BMV Reinstatement Fee Amnesty Initiative

​Video: What is an Ohio SR22 Bond?

What is an Ohio SR22 Bond?

---