Duggan: If Elected, I'll Start An Auto Insurance Company To Cut Detroit's Rates

August 28, 2013, 4:43 PM by  Bill McGraw

In setting out a 10-point plan to rescue Detroit neighborhoods Tuesday night, mayoral candidate Mike Duggan said if elected he would create a municipal auto insurance company to help city motorists with their sky-high bills.

Speaking to a friendly crowd of more than 300 people at Triumph Church, at E. Grand Boulevard and the Chrysler Freeway, Duggan said:

“These problems are not unsolvable. I believe this city is a lot closer to being turned around” than most people believe.

Duggan, the former CEO of the Detroit Medical Center who has a long resume of public-policy jobs, will face Wayne County Sheriff Benny Napoleon in the November election for mayor of Detroit.

While discussing his multi-pronged neighborhood plan, Duggan didn't bring up his idea to cut auto insurance rates until an audience member asked him what he would do about Detroiters paying significantly higher premiums than suburbanites.

Duggan surprised the crowd and drew a huge burst of applause when he responded:

“I intend to start a Detroit auto insurance company.”

He even used the term “D Insurance.” 

While he did not provide a lot of details on the company plan, the concept of city hall getting into the auto insurance business to help alleviate one of the biggest financial drawbacks to living in Detroit showed Duggan is at least thinking out of the box.

Duggan said when he moved into Detroit from Livonia a year and a half ago, his auto insurance premiums doubled. It's not unheard of for Detroiters to establish addresses in the suburbs so they can avoid city rates -- a practice that also makes it impossible for them to vote in Detroit elections. Politicians have talked for years about doing something about what they consider insurance red-lining, but no one has succeeded in bringing down the costs of insuring a car within the city limits.

But as Duggan himself acknowledged later in the evening on another subject, "Any politician can say what they will do" if they are elected.

Carrying out such a bold plan will be an enormous task. But Duggan said when doctors at the Detroit Medical Center were being forced to pay exorbitant rates for malpractice insurance, “we started our own insurance company” that helped the physicians and even ended up turning a profit for the DMC.

As mayor, Duggan said he would go after the 80 percent portion of insurance payments that are devoted to collision coverage, and has already started talking to Detroit-based bump shops about providing discounts to city residents.

With Republicans controlling the governor's office and the legislature, Duggan said Detroiters cannot expect any relief from Lansing, and they must make changes themselves.

He said once the auto insurance plan was working, he would devise a plan to provide property insurance.

(A little-known section of Detroit's new charter deals with municipal auto insurance. Click here.)

The 10-point plan

The neighborhood economic development plan he presented Tuesday is still a work in progress, Duggan said, and he asked for feedback so he can consider other ideas before releasing his final package next week.

His main concept is a new Department of Neighborhoods, which he said he would establish to replace the 14 agencies that residents and business owners now have to deal with for such issues as vacant properties, dangerous buildings, demolition and squatters.

Noting that those agencies are mainly located downtown, Duggan said he would decentralize the Department of Neighborhoods into the seven new city council districts to make them more accessible.

“You’re going to have one place in your neighborhood to go,” Duggan said.

In addition to the Department of Neighborhoods based in council districts, Duggan’s eight other points are:

3) Seize abandoned homes and drug houses through the nuisance abatement programs he started as Wayne County Prosecutor a decade ago.

4) Create incentives to persuade residents of sparsely populated neighborhoods to move to more stable areas. One incentive: Offering residents three times the value of their homes to move.

5) Rebuild neighborhood business districts, partially through the seizure of abandoned storefronts, which would be turned over to entrepreneurs for $1.

6) Streamline the demolition process, which now included 36 steps and takes three to four years, Duggan said. He added: the city has torn down 25,000 buildings in the past 30 years but the problem has gotten worse.

7) Create tougher code enforcement. Lansing has more code enforcement officers than Detroit, he said.

8) Require banks to participate in neighborhood redevelopment.

9) Clean up vacant lots.

10) Reform the Detroit Land Bank so that vacant land can be reused.

“We’re going to tear the bureaucracy apart,” Duggan said.

Napoleon will respond today

In keeping with the setting in a house of worship, Duggan expounded like a preacher at times, pushing his program with bursts of intensity and talking non-stop for more than an hour.

While the plan shows Duggan clearly is attempting to find new solutions to old problems, he was short on how some of his ideas would be financed in a bankrupt city that is $18 billion in debt.

He never mentioned Kevyn Orr, and how Duggan’s projects would dovetail with those of the emergency manager, who already is making significant alterations to city operations.

Duggan’s vow to tear up the bureaucracy and cut red tape sounded like pledges made by every mayoral candidate over the past 30 years; no mayor has managed to turn city hall into a user-friendly place.

It’s also unclear how his plans for a large-scale makeover of city departments would square with the city charter, much less the incoming city council, which would have to sign off on some of the changes.

Campaign spokesman John Roach said Duggan plans to hold similar forums as he works on the final plans for public safety and other important issues.

Napoleon issued a press release Tuesday that said he would respond to “his opponent’s” plan today.

While it’s unusual for one candidate to hold a special session to react to a rival’s platform, Napoleon’s statement said:

“Napoleon began the conversation about transforming Detroit’s neighborhoods and his opponent has taken his cue that neighborhood transformation is necessary for any citywide resurgence.”

When an acquaintance brought up Napoleon’s scheduled meeting to Duggan in a private conversation Tuesday night, Duggan was overheard saying: “He doesn’t have a plan of his own and he’s going to criticize mine. That’s the story of the campaign.”














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