Detroit Redoubles Efforts to Cut Auto Insurance Costs

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  • In the past several months, a number of studies have shown just how costly it is for drivers in Detroit to buy auto insurance coverage in comparison with the rest of the country. Now, the city is taking a number of steps to try to alleviate those issues for residents, both by looking into a retooling of the city’s insurance plan itself and by cracking down on some of the things that can lead to higher premiums overall. Until such time as these new arrangements can be put into place, it might be incumbent upon insurance agents to help their clients understand what they’re paying for and why, as well as to help them find discounts to cut those potentially massive costs.

    The city of Detroit recently began cracking down on auto theft in particular, which can go a long way toward boosting insurance rates in high-crime areas, according to a report from the Detroit News. So far in 2014, thefts are down about 20 percent on a year-over-year basis, at about 9,000. As recently as 2005, that number was at 20,000. While officials acknowledge that 9,000 is still quite high, it should continue to have a positive impact on premiums.

    What else can be done?
    But even that won’t make as big an impact as many officials might like, the report said. Detroit residents still pay about 165 percent of the national average for their coverage, and there’s still a significant number of carjackings in the city – some 480 this year alone. However that number, too, is down from 701 in 2013, and more than 1,200 two years ago. That, too, is still three times the average of New York City’s. Further, some 60 percent of drivers in Detroit simply go without auto insurance coverage, in part because of how expensive it is, and that drives up rates for everyone else.

    Insurance agents can do a lot to improve their relationships with clients, and often one of the best ways is to simply walk consumers through every detail of their coverage. Polls show that this kind of effort will typically improve customer satisfaction and even retention ratings more than simply being able to provide the occasional discount without additional advice or service. Thus, the agents who can best strike a balance between these two concerns will typically go a long way toward ensuring a strong situation for any agent.