Homeowner insurance climbs 9.7%; companies blame rise on '08 storm damage

COLUMBUS - The cost of homeowners insurance rose nearly 10 percent last year as insurers compensated for the significant storm losses of 2008.

The top 10 insurers in the state reported an average increase of 9.7 percent in homeowners' premiums in 2009, the Ohio Department of Insurance said yesterday.

Auto insurance rates, after declining four of the past five years, also increased in 2009, but by a smaller amount.

Even with the increases the past two years, homeowners' rates in Ohio remain among the lowest in the country.

Ohio has the sixth-lowest homeowners' rates, according to the most recent figures from the National Association of Insurance Commissioners.

The state said storms, including remnants of Hurricane Ike, caused insured losses of more than $1.4 billion in 2008, the worst weather-related losses in nearly a century. Losses of this kind are a primary driver of higher premiums.

The Ohio Insurance Institute, a trade association representing insurance companies, pegged insured damage from what was left of Ike at $1.255 billion. The 70-mph winds that blew through Ohio that September damaged roofs, siding, and windows.

It was the worst storm damage since the tornado that barreled through Xenia in 1974, said Mitch Wilson, an institute spokesman. Unlike in that event, though, every part of the state was affected by the hurricanelike winds of 2008.

"This one was for the record books," he said.

Mr. Wilson said insurers cannot recoup losses through insurance rates based on a specific storm, but there is no doubt that insurance forecasts took into account the possibility of severe windstorms when setting rates for 2009.

The Insurance Department reviews rates set by companies and can deny changes considered excessive or even inadequate.

State Farm, the biggest homeowner insurer in Ohio with nearly a quarter of the market, had an average rate increase of 12.1 percent in 2009. Allstate, No. 2 in Ohio, had an increase of 7.2 percent, and No. 3 Nationwide increased rates by an average of 14.3 percent.

"The rate in 2009 was driven by current economic conditions and unprecedented catastrophe losses," Nationwide spokesman Liz Christopher said.

It was the second straight big annual increase for homeowners after four years of basically flat rates. Insurance rates rose an average of 7.2 percent in 2008.

The state insurance institute projects that homeowners' insurance rates will rise 2.9 percent this year to an average of $653, $226 less than the national average.

Car insurance rates among the top insurers rose 2.8 percent in 2009 and were the 11th-lowest in the country, the Insurance Department said.