Monday, 17 April 2017 21:09

Detroiters Unite to Demand More Affordable Auto Insurance

Written by Rod Meloni - Reporter, CFP®, Derick Hutchinson

One topic that unites Detroit residents in anger: increasing auto insurance rates.

Rates are climbing higher and becoming more and more unaffordable, so there's a new push to change the Michigan auto insurance law to give residents some relief.


Detroit Mayor Mike Duggan's office said 60 percent of Detroiters who drive a car are driving without any insurance. Fed up with the entire no-fault insurance cost, residents have formed a group called Detroit Alliance for Fair Auto Insurance.


The group is demanding Lansing to get serious about making insurance affordable.


It's not unusual to hear that Detroit residents who buy full insurance are paying around $5,000 per year. High auto theft rates, excessive fraudulent stolen car claims and the state's unique, unlimited, lifelong catastrophic injury benefits are some of the reasons for the high rates.


But pastor Darrell Reed of the Spirit of Love church on the city's east side says drivers with perfect records don't get a fair shake.


"You could have someone else who lives in the suburbs have a few accidents on record, speeding tickets on their records -- guess who's paying the higher insurance? The Detroiter with the perfect driving record," Reed said.


Reed, City Council President Brenda Jones and community activists are calling on the state Legislature to go to work on the problem. They want Michigan residents to push legislators across the state for rate reductions.


"They're sky high. Everybody knows that," Detroit resident Ken McPhaul said.


McPhaul said he spends $1,700 per year on the most basic coverage.


"Yeah, I'd like to have more coverage," McPhaul said. "Can I afford more? Not really."


Dr. Ray C. Johnson said the effect on the city is wide-reaching, too. He believes it's a major contributing factor in the lack of liftoff in the city's neighborhoods.


"It's a concern, not only in terms of the resident, but also the attractiveness of the city and folks coming back," Johnson said.


The state's largest insurer, AAA, and the Insurance Alliance of Michigan said they also want to see change in Michigan's no-fault auto insurance law. They said the auto theft fraud is the largest underlying factor.


Duggan made reducing auto insurance rates the centerpiece of his State of the City address this year.


The question now is whether Lansing is willing to do anything about the issue.




We would like to thank Click On Detroit for reprint permission.


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