MONDAY, FEBRUARY 9, 2015
We received an email from Lt. Governor and Dept. of Insurance Director Mary Taylor warning Ohio insurance consumers about price optimization. She proceeds to explain price optimization as the insurance companies practice of varying premiums based on factors such as whether a consumer has complained about a policy or the amount or percentage change of the consumer's premium over prior years. This is done in order to charge each insurance consumer the highest price the market will bear. It represents a departure from traditional cost based rating and can result in two insured people with similar risk profiles being charged different premiums. Ohio law requires the premium to be based on the risk that the consumer brings to the company and prohibits unfair discrimination.
All insurance companies with price optimization have until June 30, 2015 to resubmit rates to comply with Ohio law.
Information for this post was taken from an email we received from Ohio Dept. of Insurance