2014 Auto Insurance Laws: EINSURANCE Explains Who Is Most Affected

Auto Insurance Laws in 2014 Will Affect Policyholders in Texas, Ohio, and Delaware

Auto insurance in America is regulated by the states, and every year, many drivers miss the news about changes in auto insurance laws in their states. This year is no exception. In 3 states in particular, Texas, Ohio, and Delaware, changes in the law will affect many motorists. Some of these changes are positive, but some could be mean higher auto insurance rates.

Changes to Texas Car Insurance Laws Will Benefit Drivers All Over the Lone Star State

Texas is one of America’s most populous states, and also home to millions of drivers, and new Texas car insurance laws will change some insurance company practices. Two new laws for 2014 will help Texas drivers better understand their policies and lower their rates.

One law restricts so-called “name only” policies. These low-rate auto policies only cover the driver named on the policy, not friends or family members who drive the policyholder’s car. The new law calls for insurers to notify policyholders both orally and in writing exactly who is covered by the policy, and the policyholder must in turn confirm the disclosure in writing. The law is intended to improve transparency between insurers and policyholders. It does not ban “name only” policies outright.

Another new Texas law protects policyholders from higher rates based merely on questions a driver may ask an insurer. In the past, insurers could change rates based on simple questions a driver might ask. Now, policyholders need not fear an innocent inquiry could lead to higher insurance rates.

Changes to Ohio Auto Insurance Laws Could Lead to Higher Auto Insurance Rates in Ohio

Changes to Texas car insurance laws should benefit drivers and even lower rates in Texas. The same can’t be said about new Ohio auto insurance laws. The Buckeye State is one of the few states where auto insurance isn’t necessarily required by state law. Instead, drivers can demonstrate that they can cover the cost of at-fault accidents, known as a driver’s “financial responsibility,” either by holding a minimum auto insurance policy or a bond for the same amount. Ohio drivers had been enjoying some of the lowest auto insurance rates in the country.

The new Ohio law doubles and even triples the minimum financial responsibility requirements. Bodily injury or death coverage for both one person and multiple people doubled from $12,500 to $25,000 and $25,000 to $50,000 respectively. Property damage coverage more than tripled from $7,500 to $25,000. The minimum financial responsibility requirement in Ohio had not changed since 1969, so an adjustment was long overdue. However, such a drastic change could mean significantly higher car insurance rates for drivers in Ohio.

Delaware Makes Underinsured Driver Coverage Available to All Policies

Meanwhile, in Delaware, a new law will benefit most drivers when involved in a claim with an underinsured driver. In the past, such claims were limited to the amount of insurance carried by the underinsured. If a policyholder carried $20,000 in underinsured coverage, he or she couldn’t access that coverage unless the damage caused by the at-fault underinsured exceeded what that driver carried. Now, innocent drivers can make underinsured damage claims regardless of the amount of insurance carried by the at-fault driver.

The information contained herein is for informational purposes only. It is not intended to provide legal advice, insurance advice, or any other professional service.


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