When Gov. Gretchen Whitmer joined an improbable coalition of Republican lawmakers and Detroit Democrats to combat sky-high auto insurance rates in 2019, the politicians patted themselves on the backs for what they described as “historic” legislation.
But nearly five years later, Michigan still has the highest auto insurance rates in the country.
And in Detroit, not only are the rates still higher than any other major city in the U.S., but they’re also rising at an alarming pace, according to new research from Bankrate.
Between 2023 and 2024, the average rates in Detroit jumped 85%, from $3,067 to $5,687. That’s dreadful news for a city with one of the nation’s lowest average incomes.
By comparison, the average cost of insurance nationwide this year is $2,543, less than half what Detroiters pay.
In Michigan, the average auto insurance rate increased from $2,345 in 2022 to $3,356 this year, one of the highest jumps in the nation, Bankrate found.
So what gives? As Metro Times reported in June 2019, Michigan’s auto insurance legislation came with no guaranteed savings and was full of “massive loopholes.”
The idea behind the legislation was to end the state’s requirement that insurance providers guarantee unlimited lifetime medical benefits. Michigan was one of the only states with such a requirement, and it was believed to be a major factor behind the high rates.
The legislation appealed to Detroit Democrats because it barred insurance companies from using non-driving factors, like ZIP code, credit score, gender, marital status, occupation, education, and homeownership, to determine rates.
But the 2019 legislation stopped short of addressing the liability portion of coverage, prompting one insurance executive to tell the Detroit Free Press that increases in the liability coverage portion of motorists’ bills could offset any savings from eliminating guaranteed unlimited lifetime medical benefits.
The bill also failed to eliminate redlining, and the legislation was crafted behind closed doors by Whitmer, auto insurance executives, and Republicans.
Although Detroit and Michigan still have the highest rates in the nation, the overhaul in 2019 appears to have had some positive, albeit modest, impact.
Last year, MarketWatch Guides found that Michigan’s average auto insurance rates dropped 18% since 2021 , resulting in an average annual savings of $787 per year on full coverage insurance, while most states saw rate increases.
Nevertheless, Michigan drivers — especially in Detroit — still have sky-high insurance rates.
Lawmakers could revisit the auto insurance legislation this year to reduce rates in high-cost areas like Detroit, Bridge Michigan reported in December.
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