I was recently interviewed by Barbara Marquand of Insurance.com. Barbara wanted to know about insurance the crisis that’s occurring in Detroit, where people are driving without auto insurance. These drivers are also putting themselves at great risk if they’re seriously injured in a car crash. Here’s the full story: The city where no one has car insurance Barbara makes the important point in her story that it’s usually the poorest Detroit residents who are charged the most for auto insurance – an average of $4,000 a year. I told her that choosing to go without auto insurance is a matter of putting food on the table for many impoverished people living in Detroit, and abiding by the law that requires everyone in Michigan to carry auto No Fault insurance falls by the wayside. Currently, the Michigan No Fault laws provide unlimited necessary medical benefits to seriously injured auto accident victims for life. Michigan drivers are required to buy No Fault personal injury protection (PIP) coverage as part of their policy, which costs $186 per vehicle. But many people don’t realize that, aside from paying fines if they are caught without car insurance, auto accident injury victims are not allowed to seek any pain and suffering compensation whatsoever from the at-fault driver who causes the car accident, or to receive any No Fault insurance benefits. That stands even if the driver who caused the auto accident was drunk or texting while driving. In fact, until they talk to a lawyer who understands just how devastating and unfair it is, most people have no idea of the severe consequences. I told Barbara:
“I can’t tell you how many people just lost their husband or wife in an accident, and there’s nothing I can do for them.”
I believe this problem of Detroit residents driving uninsured is a civil justice and a civil rights issue. As I’ve said before, Michigan’s auto accident coverage is the nation’s best for auto accident victims, but it is also cost-prohibitive for the working poor in inner cities like Detroit, where insurance companies can use factors like credit scoring (a policy that discriminates against the poor). The answer is not to gut No Fault insurance, but to regulate the excessive profits of these auto insurance companies. We really can have the best of both worlds – keep the nation’s finest insurance system intact, and lower the price. That is if we give our insurance commissioner the same powers to regulate profit margins as insurance companies have in other states. Then we can protect Michigan drivers from being gouged, and keep more people insured on the roads. Former insurance commissioner Jay Angoff found that Michigan’s auto insurance companies are “highly profitable” and that they’re making make considerably more selling insurance in Michigan than the national average. Combine that with credit scoring, and you have a double whammy for Detroit drivers. Why do I say this is a civil rights issue? It is mostly black, city of Detroit drivers that face the consequences of driving uninsured – including the loss of their constitutional rights to a trial by jury – because they’re more likely to be driving uninsured. And it makes no sense to make the poorest pay more for insurance. People in cities like Detroit, Pontiac, Flint, and Battle Creek should not pay more for insurance than people in Grosse Pointe and Bloomfield Hills. Related information: Uninsured drivers in Detroit: How this has become a civil rights issue Steve Gursten in Detroit Free Press: “Profits, not medical claims, drive up the cost of auto insurance in Michigan.”
