detroit auto insurance costs > $10,000 a year. On average.

[veeman]

http://www.nerdwallet.com/blog/insurance/2014/02/03/expensive-cities-car-insurance/


Holy moly!  Talk about a f__ked up place. 

It's like here is America and inside America we have one city which is a complete wasteland.  You can either lawfully own a car in Detroit for 10 years or you could save up enough to put 20% down on a 500,000 dollar house.  The amount of money to lawfully own a car in Detroit for 10 years is the same as a brand new S-class Mercedes-Benz.

I can't even get my head around that.

[Laconian]

"The Motor City is known for its cars, but its car insurance premiums are the highest in the nation. In Detroit, drivers face high rates because of the city's high crime rate and Michigan's no-fault insurance system. Under state law, insurance companies must pay medical expenses, lost wages and property damage regardless of who caused an accident. The system is intended to reduce litigation costs and ensure prompt claim repayment, but many complain that costs have ballooned because lawmakers have not set a cap on claim awards.

Detroit's annual insurance premiums are not uniformly high. We found that even within neighborhoods, Detroit's annual insurance premiums varied greatly. In the Rosedale Park neighborhood, State Farm offers a policy for $25,300 a year, while Hanover offers insurance for a fraction of the price at $4,854."

Sounds like a sweet gig for insurers.

Man, that city is screwed on so many levels. Is there a political equivalent to bankruptcy, where you set the city laws on fire and start again from scratch?

[FoMoJo]

Must be really  bad drivers.

[veeman]

So none of the police officers or firemen who work in Detroit live in Detroit.  Or of the ones that do, none of them own cars?  I would consider 10 grand a year an unaffordable car insurance payment for all but maybe 5% of all city workers.

[GoCougs]

Must be really  bad drivers.

No, it's state law (= no fault insurance).

But color me unconvinced though that the average Detroiter is paying $900/mo in car insurance.

[FoMoJo]

No, it's state law (= no fault insurance).

But color me unconvinced though that the average Detroiter is paying $900/mo in car insurance.

I thought most auto insurance was no fault...has been for decades up here...and I pay about $1,000 per year.

[ifcar]

Based on some Googling, it seems that what a lot of people do is register the car with an address outside of Detroit itself.

[SJ_GTI]

I thought most auto insurance was no fault...has been for decades up here...and I pay about $1,000 per year.

Same for me on both points.

[FlatBlackCaddy]

At least the athletic sports are thriving.

I hear they have an amazing dome downtown where people come together to enjoy an evening of entertainment and celebration.

[GoCougs]

I thought most auto insurance was no fault...has been for decades up here...and I pay about $1,000 per year.

Thankfully not; most US states are "fault" insurance (most all those states in the list are no-fault states) and thus have notably lower insurance premiums. Government in its wisdom failed again with no-fault laws - what was supposed to "protect" consumers actually led to far higher incidences of fraud and owing to the lack of checks-n-balances, higher claims payouts per incident.

[GoCougs]

Based on some Googling, it seems that what a lot of people do is register the car with an address outside of Detroit itself.

Not too good a solution - check the fine print and you'll find that to be a breach of the insurance contract (ergo, loss of coverage).

[ifcar]

Not too good a solution - check the fine print and you'll find that to be a breach of the insurance contract (ergo, loss of coverage).

Right, of course, it's fraud.

[veeman]

I'm surprised there haven't been successful lawsuits against insurance companies for price gouging. 

[GoCougs]

I'm surprised there haven't been successful lawsuits against insurance companies for price gouging. 

Insurance is highly regulated - in general insurance companies have to have their risk and rate models approved by the state insurance governing body - so it's practically impossible to sue for such a reason (outside being morally wrong to do so).

[MX793]

A lot of supposedly "no fault" states aren't actually no fault.  They're a hybrid.  They work like no fault in that in an accident, you are paid immediately by your own insurance company, but if the other driver was deemed responsible for the collision by the accident report, your insurance company may go after the other driver's for the damages.

[Soup DeVille]

So none of the police officers or firemen who work in Detroit live in Detroit.  Or of the ones that do, none of them own cars?  I would consider 10 grand a year an unaffordable car insurance payment for all but maybe 5% of all city workers.

They abandoned he requirement that city police actually live in the city years ago; and even then, it was an open scam. Cops would keep "clubhouses" where a dozen or so would claim legal residence, get their mail at, and so on; but they'd actually live in the suburbs. Many of those places also doubled as illegal after hours clubs.

[Soup DeVille]

I'm surprised there haven't been successful lawsuits against insurance companies for price gouging. 

It's not price gouging if the rates are backed up by the actuarial tables.

[Soup DeVille]

Based on some Googling, it seems that what a lot of people do is register the car with an address outside of Detroit itself.

Yep.

Technically a breach of contract, but it's almost never found out.

[FoMoJo]

A lot of supposedly "no fault" states aren't actually no fault.  They're a hybrid.  They work like no fault in that in an accident, you are paid immediately by your own insurance company, but if the other driver was deemed responsible for the collision by the accident report, your insurance company may go after the other driver's for the damages.

That is how "no fault" works, at least up here.  The intention is that the persons having the claims will get reimbursed in a timely fashion, immediately, and when fault is assigned the insurance companies will settle between themselves.  I expect that the reason for such ungodly premiums down there is the litigation and highly exorbitant settlements.  It's not the "no fault" aspect, it's, purely, because of the litigious mentality.

[Soup DeVille]

At least the athletic sports are thriving.

I hear they have an amazing dome downtown where people come together to enjoy an evening of entertainment and celebration.

Google "theatre bizarre"

[Byteme]

http://www.nerdwallet.com/blog/insurance/2014/02/03/expensive-cities-car-insurance/


Holy moly!  Talk about a f__ked up place. 

It's like here is America and inside America we have one city which is a complete wasteland.  You can either lawfully own a car in Detroit for 10 years or you could save up enough to put 20% down on a 500,000 dollar house.  The amount of money to lawfully own a car in Detroit for 10 years is the same as a brand new S-class Mercedes-Benz.

I can't even get my head around that.

That's more than 5 times what I pay annually to insure 4 vehicles here. 

[veeman]

Yep.

Technically a breach of contract, but it's almost never found out.

i'd be very concerned that if a serious accident occurred while I or my family member is driving, the insurance company would dig around to find out where you actually live and then deny all coverage including legal.

[veeman]

They abandoned he requirement that city police actually live in the city years ago; and even then, it was an open scam. Cops would keep "clubhouses" where a dozen or so would claim legal residence, get their mail at, and so on; but they'd actually live in the suburbs. Many of those places also doubled as illegal after hours clubs.

True but my assumption is that at least a certain percent of big city cops and other city employees live in the city they work in.  Probably the minority but some I would imaging do. Outside of NYC and maybe one or two other places, you really need to own a car to be able to do anything in the US.  You might not need it to go to work but if you wanted to go anywhere else outside of your local grocery store, you need a car.  Not "need" but you are in for a world of hurt in your life otherwise. 

Oh.  I forgot.  There are no chain grocery stores in Detroit. 

[Soup DeVille]

Oh.  I forgot.  There are no chain grocery stores in Detroit. 

That's no longer true, although it was for a few years.

[Soup DeVille]

i'd be very concerned that if a serious accident occurred while I or my family member is driving, the insurance company would dig around to find out where you actually live and then deny all coverage including legal.

I've never heard of that happening. It is a possibility, but rare enough that few concern themselves with it.

[MrH]

Man, that city is screwed on so many levels. Is there a political equivalent to bankruptcy, where you set the city laws on fire and start again from scratch?

There needs to be.  Just level the place and start over.  It's a pretty strange place.  I go up there pretty often for work, and rarely am I ever downtown in the actual city.  All of the tax-producing business and property is in the suburbs.  It's an entire city composed of legacy city worker pensions and drug dealers.

[Byteme]

There needs to be.  Just level the place and start over.  It's a pretty strange place.  I go up there pretty often for work, and rarely am I ever downtown in the actual city.  All of the tax-producing business and property is in the suburbs.  It's an entire city composed of legacy city worker pensions and drug dealers.

In the 1950's St. Louis went from a population of over 850,000 to under 300,000 in the 60's as people fled to the suburbs.  The metro area is over 2,500,000  The place went to hell, downtown and the near North side weren't places you wanted to walk in during daylight hours or drive through at night.  Today the city has a population of just over 300,000 and is a much better place to live but the revitalization of the city itself has been slow and spotty.  I expect any effort to save Detroit will take decades.

[GoCougs]

That is how "no fault" works, at least up here.  The intention is that the persons having the claims will get reimbursed in a timely fashion, immediately, and when fault is assigned the insurance companies will settle between themselves.  I expect that the reason for such ungodly premiums down there is the litigation and highly exorbitant settlements.  It's not the "no fault" aspect, it's, purely, because of the litigious mentality.

In no-fault states litigation is greatly reduced - that was one of its pieces of fault logic that purveyors said would reduce premiums. Thing is a robust tort system is absolutely necessary for checks and balances on human behavior no matter the realm, and precisely why fault states have much lower premiums than no-fault states.

[NomisR]

http://www.nerdwallet.com/blog/insurance/2014/02/03/expensive-cities-car-insurance/


Holy moly!  Talk about a f__ked up place. 

It's like here is America and inside America we have one city which is a complete wasteland.  You can either lawfully own a car in Detroit for 10 years or you could save up enough to put 20% down on a 500,000 dollar house.  The amount of money to lawfully own a car in Detroit for 10 years is the same as a brand new S-class Mercedes-Benz.

I can't even get my head around that.

Or you can buy 10,000 houses with that year of insurance.

[FoMoJo]

In no-fault states litigation is greatly reduced - that was one of its pieces of fault logic that purveyors said would reduce premiums. Thing is a robust tort system is absolutely necessary for checks and balances on human behavior no matter the realm, and precisely why fault states have much lower premiums than no-fault states.

The person "at fault" is deemed so and their premium rate is increased accordingly.  As claims are settled by insurance companies, they are the ones bearing the cost of the claim; therefore, higher or lower settlements have no impact on 'human behaviour'.