A frightening chart from last week’s Detroit News shows just how much Detroiters pay for auto insurance – just under $6,000 per year! This is far above the second-most expensive city. Philadelphia comes in just over $4,000 per year. The average vehicle in the State of Michigan is $900 according to the article. Here’s one story:
Jim Johnson boasts a perfect driving record, but the longtime Detroiter still pays hundreds of dollars more each year than suburban residents because of his ZIP code…He said he and his wife have spotless driving records. They were recently quoted a rate of $4,500 to insure a new Chevrolet Malibu and a 12-year-old Chevrolet S-10 pickup. The pair was able to get insurance for about $2,400 for both vehicles, he said. That rate is still higher than the state average of around $900 a year for one new vehicle. “The rates are high,” Johnson, 67, said. “There is a financial penality for living in Detroit.” From The Detroit News: http://www.detroitnews.com/article/20120425/METRO/204250353#ixzz1tZ6ouOWR
The story states that as part of the recent financial consent agreement between the city and the State of Michigan, the Michigan Auto Insurance Placement Facility will have the ability to create rates using a “neutral” credit score. This could help lower rates for many Detroit residents.
It will be interesting to see if credit scoring comes back into play with the debate over changing the state’s no-fault auto insurance law. Michigan currently has some of the highest rates in the nation, but we also have the highest medical benefits paid as a result of being injured in an auto accident (unlimited personal injury protection).
Would you be willing to trade these benefits for lower premiums?
