Insurance coverage for drivers in Detroit continues to grow more expensive
Rising auto insurance rates in Detroit may be hindering the city’s economic recovery. Consumers throughout the city have seen their insurance rates soar in the past year. Detroit has been recovering from a record breaking municipal bankruptcy, which has served to make the city somewhat financially unstable. In December of 2014, the city was able to break free of this bankruptcy and its implications, but rising costs of auto insurance coverage could slow further recovery.
High insurance rates make Detroit an unattractive place to live
The city has been working to attract more people, hoping to bolster its 688,700 population. More people living in the city means higher tax revenue for Detroit. In order to encourage people to come to the city, housing prices have been cut by a considerable margin. Though home ownership is less expensive, owning a vehicle in Detroit continues to be a costly burden. The city is currently home to the five most expensive zip codes for auto insurance in the United States.
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Average annual auto insurance rate for those in Detroit is $5,000
According to CarInsurance.com, the average annual rate for auto insurance in Detroit is $5,000. This is 29% higher than insurance rates in New York City, which has become somewhat notorious for the high cost of insurance coverage for vehicles. Rates in Detroit are high even among those with good driving records. Insurance rates are likely to continue rising into the future, though city officials may petition state regulators to address the issue.
City does not have enough money to provide insurance relief to consumers
Detroit had meant to establish an insurance service that would offer inexpensive coverage to drivers. The city had hired an actuary in order to determine whether or not such an initiative would be possible. The study from the actuary found that the city does not have enough money to provide insurance relief to drivers. Many people in Detroit currently operate a vehicle without auto insurance coverage, which presents a financial risk for the city and those living in it.