Here’s another reason why lots of people are leaving Detroit: the Motor City has the nation’s most expensive car insurance. The average resident of the Detroit area pays a premium that is 165% higher than the national average, according to the Bankrate Institute.
That means the average resident of Detroit pays 130% more for car insurance than a driver in the next most expensive region, New York City. New Yorkers paid 36% more than the national average. It also means that a Detroit resident pays 208% more than a person in Charlotte, N.C., which has the nation’s cheapest car insurance. People in Charlotte pay 43% less than the national average.
So why are insurance costs so much higher in Detroit? The main culprit is Michigan’s state laws. Michigan has no-fault insurance, which means insurers cannot charge bad drivers more, even if they get into an accident. It also provides unlimited personal injury protection, which means there’s no limit on what persons hurt in an accident can sue for.
To add to the expense, your insurance has to cover an injured person’s medical bills for life if you live in Michigan. Personal injury attorneys love the system, but motorists hate it.
The situation is made worse by the high number of uninsured motorists on Detroit’s streets. Laura Adams of InsuranceQuotes.com told USA Today that 50% of Detroit drivers have no insurance. That raises rates for those who have insurance because when an uninsured person gets into an accident, the insured picks up the bill. Uninsured people are also more likely to sue after an accident, creating even more expenses.
The high price of insurance is one of the causes of that problem. Many of those driving without insurance in Detroit are average folk who simply cannot afford the high cost of insurance. The number of the uninsured goes up when insurance rates go up, which drives insurance rates even higher. Another problem is that Detroit has very lousy public transportation, which means that poor people are forced to drive there whether they want to or not.
As you can see, the average person cannot win in Detroit, which is why they all seem to be moving to other states. So the Motor City is actually unfriendly to motorists and a lousy place to drive. Average people have to pay a small fortune for the privilege there.
If Michigan wants to reverse its economic decline, its legislature needs to take a look at its auto insurance system. Those high rates are probably driving a lot of decent and hardworking folk out of the Motor City and the state, including a lot of auto workers who have relocated to places like North Carolina, along with the auto factories.