Smart Auto Insurance Blog

A proposed bill to ban higher auto and property insurance rates for those living in Detroit, Michigan and surrounding areas failed in the Senate recently according to the article “Bill to Ban Higher Insurance Rates In Detroit Fails” by Karen Bouffard on detnews.com. 

The Senate brought the bill for a vote by Sen. Martha G. Scott, D-Highland Park, who urged Congress to pass the bill.  She said the state of Michigan pays the 12th highest auto insurance rates, but in the urban area it’s the highest in the country.  Sen. Alan Sanborn, R-Richmond believes the ban would increase rates for people who live in non-urban areas. 

The new bill could result in higher auto insurance rates for 3 out of 4 Michigan drivers according to Sanborn.  He believes there needs to be another way to solve the high cost of Michigan auto insurance.  As many people are struggling in this economy, auto insurance costs are becoming challenging for many residents.  Hopefully something can be worked out to help make auto insurance more affordable for all.

The high Michigan auto insurance quotes in Detroit and other Michigan cities are driving residents out as more and more people cannot afford the high costs.  It’s also causing thousands of residents to commit fraud or drop their insurance altogether.  This is according to the article “Car insurance rate setting hits Detroiters unfairly” by Jeff Gerritt on freep.com. 

Detroit is the nation’s poorest big city yet residents pay the highest average auto insurance rates in the country.  About half of its motorists go without insurance because it’s so expensive.  Part of the reason for this problem is what’s called territorial ratings, which allow auto insurance companies to base their prices in part where people reside.  Regardless of a person’s driving record, if they live in Detroit they will pay more for auto insurance.  Insurers state the reason for doing so is because these areas have been deemed higher risk. 

Since many are unable to afford their auto insurance costs, schemes are on the rise.  Some drivers buy fake insurance certificates for as little as $50.  Some use false suburban addresses when purchasing their policy to obtain a lower quote.

The Detroit Free Press reports that mayoral candidate Freman Hendrix claims that he will file a class action lawsuit against auto insurance companies if they do not lower Detroit auto insurance rates.

Detroit auto insurance rates are the highest in the country, twice as high as the rates for Philadelphia, the second highest cost city.

According to the Michigan office of Financial and Insurance Regulation, auto insurance rates vary greatly even within Metro Detroit.

Some Michigan Auto Insurance examples from top carriers

Married couple with 2 children and a clean driving record would pay GEICO $4738 if they lived in Southwest Detroit, $3244 in Pontiac or $2482 in Warren, and $1906 in Kalamazoo for comparable auto insurance coverage before any  discounts.  Through Allstate the family would pay $13,014 in southwest Detroit, $7774 in Pontiac, $6464 in Warren and $5536 in Kalamazoo.

More information about Michigan Auto Insurance.