It's not unusual for someone who lives in downtown Detroit to pay $3,000 to $5,000 a year in car insurance, twice the amount as those in the suburbs.
A Free Press examination found that auto insurance premiums in Cleveland, a neighboring major city, are often thousands of dollars a year lower than the highest-in-the-nation rates that Detroiters pay.
JC Reindl of the Freep reports:
- A former Cleveland City Councilman who drives a BMW and has had multiple drunken-driving convictions pays less than $100 a month.
- A new resident pays about $65 per month for a Honda Accord, just slightly more than he did in the suburbs.
The Free Press found that Cleveland residents, like Detroiters, pay more for insurance than suburbanites. But the difference in Cleveland is only about $7 to $30 per month.
The higher prices in Michigan can be attributed, in part, to the no fault insurance in Michigan that provides potentially unlimited medical benefits. That being said, Detroiters pay far more than anyone else in the state.
Some insurance companies say the rates are higher in Detroit because of car theft and the fact more people drive without insurance. But it's likely far more people in the suburbs would drive without insurance if they had to pay those Detroit rates.
Some say this insurance industry practice is especially discriminatory to black people —tantamount to "redlining" areas where they live — and a major reason for Detroit's sky-high rates, Reindl writes.
"We’re simply charged for being black in Detroit," state Rep. Sherry Gay-Dagnogo, D-Detroit, said during debate in Lansing last fall on a proposed auto insurance overhaul that was voted down.
