Detroit is home to some of the highest car insurance rates in the country
Owning a vehicle in Detroit, Michigan, is quite expensive, according to a new study from InsuranceQuotes.com. The study highlights the cost of auto insurance coverage throughout the U.S., taking note of where insurance rates are highest. Notably, Detroit is home to some of the highest insurance premiums in the U.S. The city’s rates are even higher than those found in New York City, where auto insurance has long been plagued by fraud and other issues.
Rates in Detroit are 165% higher than the national average
According to the study from InsuranceQuotes.com, auto insurance rates in Detroit are 165% higher than the national average. By comparison, insurance rates in New York are 36% higher than the national average. There are many things that affect the overall cost of insurance coverage, but Michigan’s no-fault laws may be playing a large role in the cost of auto insurance.
No-fault insurance laws could be a contributing factor to higher insurance rates
Michigan is home to no-fault insurance laws, which require insurance companies to cover the costs associated with an accident regardless of where fault for the accident can be placed. Such laws represent a great deal of financial pressure for insurance companies and they have been known to provide an incentive for fraudulent activity. The occurrence of insurance fraud is often higher in states with no-fault laws than in states without them.
Large population of uninsured drivers is having an impact on insurance premiums
Another factor affecting the cost of auto insurance coverage is the large population of uninsured drivers in Detroit. Despite insurance coverage being mandatory, many drivers do not have insurance policies for the vehicles they operate on a daily basis. This presents a great deal of financial risk for insurance companies as well. In response, insurers have raised rates for the coverage that they provide in order to mitigate the risks that they face from uninsured drivers. Michigan lawmakers have been looking for ways to resolve the issues concerning the cost of insurance coverage, but no solution has yet been found.