House Bill 278 is effective on new or renewed auto insurance policies on Sunday, December 22, 2013. This bill amends several sections of the Ohio Revised Code and increases the minimum Financial Responsibility (FR) limits in Ohio.
We explained how HB 278 affects auto insurance policies in a previous post, Ohio House Bill 278’s Effect on Auto Insurance. Below we have listed the 3 most important things that motorists should know about HB 278.
3 Things to Know About House Bill 278
1 . HB 278 increases Ohio’s minimum Financial Responsibility (FR) bodily injury limits. The limits are $25,000 per person and $50,000 per accident. The property damage liability has been increased to $25,000 per accident.
The FR limits that have been in effect up until now (since 1969) were $12,500 per person, $25,000 per accident, and only $7,500 in property damage. This is a significant increase in limits.
2. Up until now, Ohio was the only state in the nation with a non-cancellation period of two years for auto insurance. Ohio Revised Code 3937.25 (B) states that “after an auto insurance policy has been in effect for more than 90 days, an insurance company is prohibited from cancelling the policy for a two-year period unless the cancellation is based on nonpayment of premium; discovery of fraud or material misrepresentation; discovery of a moral hazard or willful or reckless acts of omissions’ the occurrence of a change in the individual risk which substantially increases any hazard insured against after insurance coverage has been issued or renewed or loss of applicable reinsurance or a substantial decrease in applicable reinsurance.”
This longer non-cancellation period in Ohio resulted in fewer options for higher-risk drivers. There is more risk associate with a two-year vs. one-year policy period.
HB 278 defines the circumstance in which an insurer can cancel an auto insurance policy including fraud, driver license revocation and concealment of information.
3. HB 278 prohibits insurance companies from charging an excessive or discriminatory premium rate for auto insurance based on the location of the insured’s residence.
Before HB 278, Ohio was the only state that required auto insurance rating territories based on municipal boundaries. There were over 750 municipal boundary changes in Ohio 2007-2011 and every time this occurred, an insurer’s auto rates for that area would be automatically out of compliance.
The current law states that no municipality can be divided into smaller areas for the developing of auto insurance rates. The previous municipality rating lead some drivers to pay a rate that didn’t coincide with the risk factors associated with where they garaged their vehicles.
Read more about the changes to the municipality rating here.
How does HB 278 Affect Me?
If you are wondering exactly how House Bill 278 affects you and your auto insurance policy, feel free to call our lawyers at 800.637.8170. We can explain the changes to the law and guide you as you go through the purchasing process of auto insurance.
We also always recommend to motorists that they purchase uninsured motorist coverage. Learn more about why this is so important in the article, Recent Case shows Importance of Uninsured Motorist Coverage. You can also order a free copy of the helpful book, The Ultimate Guide to Buying Car Insurance in Ohio when calling into or office, or order directly from our website.