A lot of attention has been paid in recent months to the amount of money people living in the city of Detroit have to pay for their auto insurance. Studies have shown that premiums in the Motor City are much higher than the national average, and drastic steps have even been taken by lawmakers as a means of trying to reduce them. However, prices still remain high, and some experts believe it’s hurting the city’s chances at economic recovery. When this issue arises – as it does for many Detroit residents – it might be wise for insurance agents to explain to those people why they have to pay what they do, and what might be done to fix some of these issues.
Detroit recently made the largest municipal bankruptcy filing in U.S. history, and seems to finally be on the road to recovery, according to a report from Bloomberg News. However, one thing that would help fuel that return to a healthy local economy is a larger number of residents, but little progress is being made on that front, in part because of how expensive auto insurance is within city limits.
Why is this such a big issue?
Five of the most expensive ZIP codes in terms of auto insurance are located in Detroit, and those who wish to live near the city can simply move to a suburb 10 minutes outside of town and pay thousands less annually. The state’s no-fault insurance system is a big contributor here as it is elsewhere in Michigan, but Detroit also has a high rate of car theft that further drives up premiums based on how much risk residents face. Now, the city is trying to build its own auto insurance system to help deal with the issue, but the going has been a little slow to start out.
The fact of the matter is that when these issues come up for Detroit residents, insurance agents might not be able to do a lot for them in terms of lowering their costs to more reasonable levels. However, what they might be able to do instead is simply explain to people the various issues that impact insurance costs in Detroit specifically. While this won’t save them any money, it might give them a little more peace of mind and a better understanding of their policies while lawmakers try to work out other efforts to reduce ongoing insurance costs for residents.