Having a good credit rating is becoming a key factor in getting lower insurance rates.
YOUNGSTOWN -- The national economic slowdown of the past six months has created an unpleasant ripple effect for local consumers in the form of higher premiums for auto and homeowners insurance.
Mirroring a nationwide trend reported by The New York Times, rates for these basic types of policies are increasing in some cases by 20 percent or more in the Mahoning and Shenango valleys.
Getting the best deal these days, local agents say, is not simply a matter of a clean driving record or no claims -- it also means having a spotless credit rating and a lack of risk factors in the home environment.
The reasons for the increases are partly because of the Sept. 11 tragedies, but actually have their roots in the recession that began months earlier.
The downturn in the stock market has meant less investment income for insurance companies, forcing them to rely more on revenue from premiums, according to Todd Boyer, spokesman for the Ohio Department of Insurance.
This "hardening" has not only driven up rates, it's led companies to tighten up on the types of coverages they're willing to provide.
"They're being a little more selective about the kinds of risks they're willing to take," Boyer said.
Costly lawsuits: Another factor is court awards of claims against uninsured or underinsured motorists, as well as many successful lawsuits against homeowners for what Frank Shattuck of the Donald M. Weibling Insurance agency in Youngstown said were once relatively simple claims.
"A dog bite that used to be a few hundred dollars in medical expenses now turns into a multithousand-dollar claim," he said.
Even with the increases, several local insurers said that there's no typical rate for individual auto and homeowners insurance. Rates are based on urban or rural locality, driving record and claims experience. Increasingly, however, these rates are affected by what the industry calls "credit scoring."
The better a person's credit rating is, Nationwide agent Bob Rutkousky of Boardman explained, the lower his insurance premium will be. Despite the current climate, Rutkousky said this has actually caused auto premiums to decrease for some of his clients. Good credit, several other professionals echoed, is a significant factor in keeping premium costs down.
Besides paying bills on time, consumers can also apply a healthy dose of common sense in their daily lives.
"Very aggressive" drivers who habitually speed and become involved in accidents tend to pay the highest premiums, Youngstown independent agent Wayne Patrick said. A DUI conviction can also send rates skyrocketing, he added.
Cut down on risks: Reducing risk is the order of the day in the home. Rutkousky stated that Nationwide is now inspecting the homes of all policy holders to identify, and hopefully eliminate or reduce, situations that could lead to claims.
Fence in swimming pools, he advised, place rails on decks, make sure that trampolines have netting around them and don't keep "vicious animals" as pets.
"People must fix those items, or they won't be renewed," Rutkousky noted.
Homeowners must also make sure that steps are secure, and that there is no loose siding or hanging gutters, he added.
Although news of the increased rates may send consumers shopping for better deals, Farmers representative Doug McBride of McBride-Shannon Co. in New Castle maintained that a personal relationship with an agent is the best type of insurance.
"When you really need an agent is when something happens," he advised. "Get an insurance package that's right for you, and get an agent you're comfortable with."