Analyzed Insurance

Michigan Senator Virgil Smith is looking to help some Detroit residents lower their auto insurance rates drastically by introducing new legislation that would allow certain drivers to obtain scaled-back policies and thus cheaper coverage.

Under the new legislation, drivers with a clean record (i.e. no points in the last three years) who earn less than $30,000 per year and drive a car worth $20,000 or less would be eligible to obtain auto insurance with lower minimum requirements for personal injury protection (PIP) coverage.

The lower minimum requirements would drive down the cost of the insurance policies and would make securing coverage more affordable for many Detroit residents.

“My goal is to reduce [Detroit auto insurance] costs by 25 to 30 percent,” Smith told Fox 2 Detroit recently.

In the same interview, Smith said that getting premiums for Detroit drivers down to “around a hundred-something dollars” per month could really help residents out and, in turn, help keep people from leaving the city.

A recent study found that auto insurance rates in Michigan (average annual premium of $2,541) are the highest in the country. And average auto insurance rates in Detroit are even higher than the state average, going all the way to $6,000 per year according to some reports.

Smith said he is hopeful that support for the proposed plan will grow as it works its way through the Michigan legislature.

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