STATE MINIMUMS GO UP IN DECEMBER
After being stuck at 12.5/25/7.5 since 1969, state minimums in Ohio have finally gone up to 25/50/25. Some people in the industry think those are still too low. When the current minimum limits were set up in 1969, the average price of a car was $3,270, so $7,500 in property damage would usually cover the replacement of most vehicles. But a lot has changed since the days when the minimum wage was $1.30, gas was .35 a gallon and you could buy a new Camaro or Mustang for about $2,700. How far does $7,500 go in replacing today’s cars, where most cost in excess of $20,000 and many in the $40,000-$50,000 range?
The cost of litigation has also soared. Lawsuits used to be settled for hundreds or low thousands of dollars. Now, the sky is the limit. So the financial responsibility increases are way overdue and still not enough in today world. But, at least it’s a start. The 1-800 and the on-line insurers really do a disservice by advertising that they can sell you the minimum required to keep you legal, because it really doesn’t keep you morally right.
HB 278, which was the bill that raised the financial responsibility limits, was widely supported in the insurance industry. A PIA survey that was taken prior to the house vote showed that 89% of members supported the bill. However, a lesser publicized part of the bill now prohibits the exclusion of intra-family members in the event of the death of a family member of the insured. So, essentially it opens liability coverage to family members, which most likely will involve some rate adjustments (meaning increases) somewhere down the road.