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Mayor, residents sue over high car insurance rates in Detroit

Curbed logo Curbed 8/23/2018 Robin Runyan
several tall buildings in a city© Photo by Michelle & Chris Gerard

The highest in the country

Driving in Detroit comes at a high price—the highest in the country for car insurance. While there’s been a lot of talk for years around no-fault insurance and how it affects Detroiters, a law suit aims to change that.

Mayor Mike Duggan and a group of eight metro Detroit residents have filed a lawsuit in US District Court in order to declare no-fault insurance unconstitutional.

The Detroit News reports that:

“The No-Fault Act has failed Michigan residents at every turn,” the suit contends, noting the plaintiffs are seeking a declaration that the law is unconstitutional. “The State should be given 6 months to repair the automobile insurance scheme. If that deadline is not met, the No-Fault Act should be deemed null and void and the tort system, used by a significant majority of states, should be reinstated.”

When the No-Fault Act went into effect, prices were supposed to remain “fair and equitable.” There’s nothing fair or equitable about Detroit’s insurance prices, which the suit claims average $6,197 per year. Yes, that’s a 6.

Detroit’s median income is $26,249 and the city has a 39.4 percent poverty rate.

The high insurance rates here often lead to residents either foregoing insurance or claiming a residence outside of the city.

“This law is causing thousands of people across Michigan to break the law by driving without insurance because they simply can no longer afford it,” said Mayor Mike Duggan. “Because the Legislature has not shown the leadership to address the issue, we are asking the court to provide residents the relief they need from these unjustifiably high insurance rates.”

Rates vary widely by zip code, city, and county, although Michigan’s average of $3,059 per year is much more than surrounding states. Ohio comes in at a $1,236 average, with Illinois at $1,158, and Indiana at $1,365. The U.S. average is $1,512.

Metro Detroit suburbs don’t have it much better. Southfield averages $4,443 per year, with Warren at $3,446, and Roseville at $3,378.

Residents could ditch their cars, but that choice would be easier if Wayne, Washtenaw, Oakland, and Macomb counties could agree on a regional transit plan.

The group is suing Patrick McPharlin, director of Michigan’s Department of Insurance and Financial Services, in the law suit.

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