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A new report from the US Census Bureau shows that auto theft in Detroit is down, way down. But the auto insurance companies don’t seem to be listening to the good news.
According to the US Census Bureau, Detroit auto theft is down 69% since its peak in 1984. In 2013, 24,567 cars were stolen, compared to 78,578 thirty years ago.
The decline is due in part to some innovative law enforcement technology, like bait cars and license plate readers. On top of that, car manufacturers are building in more theft prevention methods into their vehicles, making cars much harder to steal than they used to be. That’s good news, especially since insurance companies are often citing crime as a reason for Detroit’s higher auto insurance premiums.
But this time, the Insurance Institute of Michigan is pointing elsewhere to justify their premiums, blaming the state’s No Fault Insurance Act. Michigan has the strongest laws in the country protecting its motorists from devastating medical bills after automobile accidents. Your no-fault auto insurance provider is required to pay for all of your medical expenses and up to three years of lost wages.
According to the auto insurers, that premium coverage is what costs Detroit residents so much money. But that doesn’t explain why rates are so much lower just across the border in the suburbs.
The difference has some experts asking whether the companies are using the illegal practice of redlining – refusing coverage or raising the price for risky zip codes where many people of color live. While blatant race-based redlining is a thing of the past, Detroit’s disproportionately high insurance costs casts suspicion on what Gregory Squires, a sociologist at George Washington University, calls “arbitrary underwriting guidelines.” That suspicion is only heightened when the insurance companies’ premiums don’t change to match the reduced risk of auto theft.
It remains to be seen whether the no fault auto insurance companies will be pressured into adjusting their rates by these findings or by Mayor Duggan’s proposed citywide insurance program. But one thing is clear: they can no longer justify the expense based outdated statistics of auto theft.
David Christensen is an auto accident attorney at Christensen Law in Southfield, Michigan. He and his team fight against no fault auto insurance companies to make certain their clients receive the benefits they deserve. If you or someone you know is getting the run around from your insurance company, contact Christensen Law today for a free consultation.