You are paying a hidden tax on your property, mandated by the state of Ohio and charged through your home insurance. It is called the Ohio Fair Plan and its current tax rate is 1.25 percent of the premium costs of your home.
According to the law, the premiums help pay for the insurance of property owners in urban areas that are uninsurable under normal underwriting and risk standards. If you own property in an area free from the risks that would otherwise cause an insurance company in Ohio to refuse a policy, your insurance premiums are still being raised to cover property in those high risk areas.
The insidious way the legislature created and applies this tax is the most reprehensible of all. It passed laws and regulations that created the Ohio Fair Plan Underwriting Association, then mandated any insurance company doing business in Ohio and writing homeowners insurance must be a member of the association and must write their fair share of these high risk policies.
Up to this point, the law sounds like it is preventing insurance companies from avoiding more risky exposures. The association is governed by a 12-member board, four of whom are appointed by the governor. The other eight are representatives of insurance companies.
The law gives this board authority, with approval of the superintendent of insurance, who is appointed by the governor, to set a rate and pass on the risk of insuring these high risk properties to the insurance companies, who are authorized to pass on the costs to all their policy holders.
Another form of welfare, funded by responsible citizens, without demanding any accountability of the beneficiaries.
Watch your next homeowners insurance premium statement. Your insurance company might honestly list it separately, or may quietly hide it in your premium rate as allowed by Ohio law. Either way, you have to pay.
Ronald G. Kaufman