As an insurance agent, you serve a meaningful role as risk advisors, helping clients understand how and why their premiums are determined. However, with evolving underwriting models, explaining and justifying premium increases has become increasingly challenging. When an agent cannot explain a premium increase, it can put a strain on their relationships with clients.
Current Ohio law requires that insurance carriers notify their insureds about a “substantial” increase in premiums for commercial insurance. It is concerning that Ohio law does not require notification for significant premium increases in homeowners and auto insurance. In addition, having an unclear definition of “substantial” is unfair to consumers and their insurance agents, as it fails to establish a clear metric for insurance carriers.
Premiums on the Rise
As an agent, you may receive questions from clients wondering why their premiums have increased, even when their individual risk factors haven’t changed. For instance, a client with a spotless driving record for the past decade might be frustrated to see their auto insurance rates rise by 12%. Similarly, a business owner who has maintained their commercial property for over 15 years without filing a claim may be perplexed by an 11% rate hike. When clients experience these increases without a clear explanation, it can lead to confusion and frustration.
However, many premium increases are driven by broader market forces beyond an individual policyholder’s history. Factors such as extreme weather events, inflation, rising interest rates, and the escalating costs of litigation – particularly litigation financing – are all contributing to higher insurance costs. While these factors may not be immediately visible to policyholders, understanding and effectively communicating them can help agents and insurance carriers build trust.
OIA’s Legislative Ask
The Ohio Insurance Agents Association intends to work with members of the Ohio General Assembly to introduce legislation that would require carriers to provide reasoning for premium increases above 10%. We support adopting the National Council of Insurance Legislators (NCOIL) model law, already enacted in Indiana, which requires insurance carriers to explain the principal factors for an increase in premium of over 10%, reduction in coverage, non-renewal, cancellation, or another unfavorable change in terms of coverage in connection with a personal auto or homeowner’s policy.
This legislative change would amend Ohio Revised Code 3937.27 to better protect consumers by defining a “substantial” premium increase as over 10% and expanding transparent requirements beyond commercial policies to include auto insurance with the current Revised Code.
Conclusion
If you support OIA’s legislative initiative to require carriers to provide reasoning behind premium increases above 10%, please contact George Christy at George@ohioinsuranceagents.com to share how the current timeframe has impacted your clients and agency.
Advocacy from agents has a meaningful role in driving this legislative change. As independent agents, you provide your clients with the guidance they need to make informed coverage decisions. Mandating that carriers explain premium increases exceeding 10% will enhance consumer protection, promote transparency, and foster stronger relationships between consumers, carriers, and agents.
About the Author:
George Christy joined the Ohio Insurance Agents (OIA) as the new Government Affairs Manager, starting on January 6, 2025. George brings experience from his previous roles at the Ohio Department of Transportation (ODOT). At ODOT, he was part of the communications team, and he worked on legislative and regulatory issues with the Legislative Affairs team. George brings experience from his work on state legislative campaigns, his time as a Legislative Aide in the Ohio House of Representatives, and his roles at a state agency. George grew up in Delaware County and is a graduate of The Ohio State University where he studied Political Science and Economics.
