Over the past several years, the cost of auto insurance coverage has slowly but surely been on the rise, but in certain parts of the country, that has become even more of an issue for residents. As a result of certain risks and other factors, residents of Detroit pay some of the highest auto insurance rates in the country. Now, their city is looking for ways to help them deal with that issue on its own. In the meantime, it might be wise for insurance agents operating there to make sure they are doing all they can to help consumers concerned about their ongoing coverage costs to understand what they’re paying for and why.
Earlier this month, the Detroit City Council unanimously approved a contract for an actuarial firm to begin looking into whether the city would be able to feasibly sponsor its own city-run auto insurance company to help drive prices down for residents, who pay some of the highest premiums in the country, according to a report from Crain’s Detroit Business. Mayor Mike Duggan recently said that since he moved into the city with his family earlier this year, his auto insurance premiums had gone up more than $3,000.
“[T]he high cost of auto insurance has been one of the key reasons residents have been leaving the city for years,” Duggan said in announcing this new deal, according to the site.
What could this do?
If the study is successful and finds that the city could afford to sponsor its own auto insurance company, residents might see rates drop significantly, the report said. Right now, they pay such high premiums both because of the high risk of accidents and auto theft in the city, but also because the entire state of Michigan has a no-fault auto insurance system that helps to drive up costs for insurance companies across the board.
Insurance agents who can explain these issues to consumers will likely be those with the highest customer satisfaction ratings and retention rates. That’s because consumers tend to prefer receiving high-quality customer service that can help them understand their policies over even something as significant as the occasional discount on their premiums. For this reason, and in circumstances where coverage can get this expensive, it’s usually a good idea for agents to find a little bit of wiggle room nonetheless.