There was a time when Detroit was an epicenter of the American dream, a cultural touchstone around which America’s love affair with the motor vehicle was built. A flourishing auto industry brought Detroit to the forefront of the public consciousness; when you thought of American cars, you thought of Detroit, the Motor City. But times have changed, and Detroit, like the American auto industry it once ruled, is a ghost of its former self.
For many, even having a car at all in Detroit can be a financial burden. Sky-high insurance rates have made it difficult to keep a car on the road in a city (and state, and country) where making ends meet is already tight for many. But why is Detroit car insurance so expensive — and what, if anything, can be done about it? We’ll discuss some strategies for bringing down your insurance premiums and examine a visionary idea proposed by Detroit’s mayor to improve the plight of the Detroit motorist.
Just how bad is the insurance situation in Detroit? According to a recent study by Market Watch, the Motor City has the highest car insurance rates in the United States. And it’s not just Detroit, either: the entire state of Michigan is contending with exorbitant auto insurance premiums, making the idea of cheap Michigan car insurance remote at best.
Let’s look at the hard numbers from Ross Martin at The Zebra. According to Martin, Michigan motorists pay an average of $2,639 per year for car insurance — 73% higher than the U.S. average. But that’s not nearly as high as your premiums could go — if you buy a policy from Bristol West, for example, your premiums could be $3,951 a year, or even higher. What neighborhood, what car you drive, and other demographic factors could bring your annual premiums up to $5,000 a year or even more. Contrast this with the national average of $1,500 a year (according to the Insurance Information Institute) and you have a recipe for a crisis.
So what’s going on in Detroit that’s made rates so over-the-top? As it turns out, a few factors:
- No-Fault Insurance System: Michigan operates under what’s called a “no-fault” insurance system, which means that your own insurance company pays for your medical expenses and property damage, regardless of who is at fault. While this system does provide some advantages, it also drives up insurance rates.
- High Medical Costs: Health care costs are out of control nationwide, but Michigan has some of the highest in the nation, and those high costs get factored into the price of insurance. One reason for this? Michigan’s requirement for unlimited personal injury protection (PIP).
- A significant number of Detroit residents are either uninsured or underinsured, which makes accidents riskier and more expensive for everyone. Detroit also has a high rate of auto thefts, which further drives up premiums.
Fortunately, there are steps you can take to bring your insurance rates down.
For one, you can bundle your auto and homeowners insurance together for a discount. Speaking of discounts, you might also consider asking your existing insurance company about them — you might be eligible for more than you think.
You could also invest in safety features such as lane-keep assist, automated braking, drowsiness detectors, and so on — as well as anti-theft and safety devices. All of these could result in a substantial discount from your insurer. You might also shop and compare rates between insurance companies. There are plenty of free, online tools that can help with this, and you can get quotes from multiple insurance companies in a short time.
Because your credit score, driving record, and insurance history make a big difference in how insurers assess risk, do your best to keep all three as clean as possible. The kind of car you drive can also make a big difference in your premiums, so it might be wise to either trade down to a cheaper vehicle, or find one with some of the aforementioned safety features so that you can reap the discounts.
In hopes of abetting the insurance crisis somewhat, Detroit’s mayor has recently put forward the idea of creating a state-owned insurance company that offers lower premiums, aimed at those who can’t afford private insurance. Since the program would be state-supported, the company could make insurance much more accessible, while providing the same amount of coverage as private insurance. This idea is still in the early stages, however, and there is a ways to go before these plans come to fruition.
Detroit’s auto insurance woes are undeniably difficult for Motor City drivers, but there is hope. Even if the mayor’s plan doesn’t come to pass, there are still ways a savvy driver can bring their insurance premiums down to earth.
Amber is the proud mother to four beautiful children, Damian (27), Rosaleigh (14), Carlyn (11), and Naomi (8). Her family also includes four cats.
She loves being a stay-at-home mom and feels blessed to be able to care for her children full-time and provide them with so many opportunities through Metro Detroit Mommy. In addition to Metro Detroit Mommy, Amber has a passion for hosting karaoke with Malibu Entertainment. She enjoys the metro Detroit nightlife especially, singing, dancing and meeting new people.