Detroit Mayor Proposes Lower Auto Insurance Rate Plan

Detroit Mayor Mike Duggan recently announced his plan to reduce auto insurance rates for city residents. The plan, which he calls “D-Insurance”, could cut auto insurance rates for Detroit residents by as much as one-third. The plan comes in response to state laws requiring that insurers provide full medical coverage for anyone who suffers an injury in an auto accident. The plan has drawn criticism from both insurers and groups seeking to protect underprivileged drivers.

Details of Auto Insurance Rate Plan

Like most states, Michigan law requires that all drivers carry auto insurance. Policies sold in Michigan must include Personal Injury Protection, which ensures that anyone injured in an accident receives full coverage for any medical expenses. This provision, combined with the state’s no-fault insurance law, leaves drivers with some of the highest auto insurance rates in the country. Mayor Duggan proposed his D-Insurance plan to reduce auto insurance rates for city residents, while also reducing the personal injury benefits.

Benefits of Auto Insurance Rate Reform

The plan would allow drivers to use either their private health insurance or government-sponsored plan, such as Medicare, Medicaid or health insurance exchange plan, to cover their medical costs after an accident. Mayor Duggan has stated that the plan would cut auto insurance rates for Detroiters by an average of $1,000 a year. He also told the City Council that the plan would stop providers from using credit scores as a basis for their auto insurance rate quotes.

Drawbacks of Auto Insurance Rate Plan

Mayor Duggan’s plan is not without its detractors. Insurance companies would stand to lose millions if auto insurance rates were reduced. The plan could also call on insurance providers to reveal their profit margins, a fact that most companies keep a closely-guarded secret. Attorneys for auto accident victims have also stated that the plan would still leave city residents with some of the highest auto insurance rates in the country, while reducing injury coverage. The lack of comprehensive injury coverage could force underprivileged drivers to rely on Medicaid, which would pass their care expenses on to taxpayers.

Auto Insurance Rate Reform Sparks Debate

Detroit residents can pay as much as $5,000 per year for their coverage, while auto insurance rates for suburban residents are often half as much. Nearly half of the city’s residents have no insurance at all due to the high auto insurance rates. Mayor Duggan’s plan could reduce those rates for drivers with low incomes and poor credit scores. However, the plan would limit emergency room coverage to $250,000 and post-accident care down to $25,000. Accident victims would be left to rely on their own resources for any additional expenses.

Source: Michigan Public Radio

Get Answers For Your Auto Insurance Lawsuit Questions

To find out how we can answer your questions about auto insurance lawsuits, contact one of our attorneys today. Our intake team will take down the details of your case and quickly connect you to an attorney who understands how to get the most from your auto insurance lawsuit. You can also fill out the “Free Case Evaluation” form at the top of this page.