Car insurance is expensive in Michigan. In fact, in a very recent study, despite all the changes to the Michigan no-fault law and Michigan automobile laws Michigan still has the second most expensive insurance rates in the country. Only Louisiana is more costly. But as expensive as auto insurance is in Michigan, it is even more so in Detroit, but there are always ways to save money and find cheaper car insurance.
Why is Car Insurance So Expensive in Detroit?
Detroit has some of the highest car insurance rates anywhere. The reasons for this vary and are controversial. Although auto insurance companies are not supposed to take zip codes and similar factors into consideration when pricing our insurance (this is called redlining), they get around these rules in other ways. For example, carriers such as State Farm and Allstate will look an applicant’s credit score to assess how much they will charge for auto insurance.
Another reason for the high car insurance rates in Detroit is because car theft and vandalism are higher in the city compared to other areas of Michigan. Insurance is nothing more than an assessment of risk. If something is riskier, an insurance company will charge a higher premium to insure that risk.
In addition, Detroit has a higher rate of car crashes and truck collisions. Because of the higher level of traffic in the city, Detroit naturally has more accidents. This in turn increase the risk for the insurance company, which in turn leads to higher premiums.
Detroit Has Lots of Potholes and Poor Road Conditions
Another reason for the high cost of auto insurance in Detroit are the poor road conditions. Although many major city streets such as Woodward Ave., Gratiot Ave., I75, and Grand River Ave. have had repair projects over the last few years, most of the neighborhood streets are in horrible condition.
Michigan has harsh winters with lots of freezing and thawing. This cycle wreak havoc with concrete and Michigan roadways, causing potholes and dangerous road and highway conditions. Naturally, these potholes lead to higher car accidents, crashes and claims.
But there are ways to save money on car insurance, even in Detroit.
#1 – Shop Around
It is important to shop around for car insurance. Not all auto insurance is the same. It is not like gasoline or flour. Insurance is a financial product with different choices. It is important to ask different agents what they offer and the cost for each coverage.
There are certain insurance coverages that are mandatory in Michigan. These include bodily injury (covers you if you are negligent for causing injuries), personal injury protection (PIP – covers your own medical expenses, lost wages and other benefits) and property damage insurance (if your vehicle causes property damage).
The minimum amount of bodily injury coverage is $50,000 per person or $100,000 per accident. But this is just the minimum and it makes sense to have more insurance than this if you have assets to protect.
PIP coverage is also important because it covers medical expenses from a wreck that health insurance doesn’t cover. And many plans – such as Medicare, Medicaid and many private health plans don’t cover auto accidents at all.
#2 – Look at Independent Agents
Some insurance companies have captive agents. For example, State Farm agents only sell State Farm policies. This is also true for Farm Bureau. Shopping this way for car insurance has never made sense to me. Would you shop at a grocery store that only sold one brand of bread or milk? No. You would want to compare different choices based on price and quality. The same should go for auto insurance.
Independent agents can compare different auto insurance company prices. They can give you multiple quotes from different carriers. This way, you can make a smart, more informed car insurance buying decision.
#3 – Drive Safer
This makes sense, but the safer you are over time the less risk you are to an insurance company. By having a good driving record, the insurance company will give you cheaper rates. This includes not having speeding tickets, traffic tickets as well as Detroit car crashes.
#4 – Ask For Discount Options
Most insurance companies now have discounts for purchasing multiple insurance products. For example, bundling car insurance and homeowners’ insurance will often lead to a discount. Ask if the insurance company will provide this. Also ask the agent what other discounts they have. Some may include discounts for military service, law enforcement, education and other professions. Carriers sometimes even have discounts for alumni of different colleges and universities.
What are the Penalties for Not Affording Car Insurance in Detroit?
Affording car insurance in Detroit is not easy. Unfortunately, under the law every owner of a car must have auto insurance. The failure to do so can result in civil penalties and tickets. It also can prevent an injured person from obtaining no-fault benefits and even pain and suffering.
For example, if you are driving your own uninsured car or truck and you are involved in a car accident, you cannot make a claim for medical bills or lost wages caused by the wreck. Most of the time, you cannot make a claim for pain and suffering either. This is true even if the other car caused the collision!
The penalties for driving your own car without insurance in Detroit are very severe. That is why it is best to do whatever you can to insure your car.
Can I Get a Refund on My Car Insurance?
This spring, Governor Whitmer has pledged to refund $400 per vehicle to every policyholder. This includes the policyholders in Detroit. This is part of the cost savings that have developed as part of the Michigan no-fault law changing in 2019. These savings have come at the expense of catastrophically injured individuals and the system in total. However, the refund will occur.
Call the Detroit Car Crash Accident Lawyers
If you have any questions about buying auto insurance in Detroit, or anywhere in Michigan, call the law firm that has been helping auto accident injury victims for decades.
The call is free at 1-800-LEE-FREE (1-800-533-3733), and we never charge a penny until we win your case. That is our LEE FREE guarantee to you and your family. Call us today.
