COLUMBUS, Ohio - In a rare move, the Ohio Department of Insurance has rejected a 3 percent rate increase in auto insurance rates requested by Allstate Insurance. The move will save policyholders $7.2 million.
Allstate, the fourth-largest auto insurer in Ohio with 7.5 percent of the market, made the filing Jan. 21 for an increase that would affect all auto insurance products.
"Allstate was simply unable to produce convincing evidence to justify its rate increase," Ohio Insurance Director Ann Womer Benjamin said.
The department said its actions likely prevented other insurers from seeking increases based on Allstate's filing.
Northbrook, Ill.-based Allstate increased rates 1.6 percent in Ohio in 2002 after it decreased rates by 1.1 percent in 2001.
The company said the proposed increase was based on rising costs associated with medical care, motor vehicle repair and maintenance.
"We are disappointed with the department's rejection," said Allstate spokesman John Goldwater Jr. "We believe we made a very compelling case for why this very modest rate increase was necessary and appropriate."
Under state law, companies must file increases with the department along with financial data supporting the new rate.
Insurance regulators said they recall only two or three times in the past eight years that an insurer has been unable to support a proposed rate increase.
The average cost of insuring cars is expected to rise 9 percent nationally this year, boosting the average premium by $80, according to the Insurance Information Institute, a national trade organization.
In 2000, only six states had lower auto premiums than Ohio's average of $645.79.
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