Study: Auto insurance in Detroit is most expensive in nation – by far

Sometimes it’s not the lack of a car that forces people to stop driving in Detroit. It’s often the cost of insurance.

Detroit’s annual average premium for auto insurance is $10,732 – about 10 times higher than many U.S. cities, according to Nerdwallet.com, a consumer-information site.

The city with the second-highest premium is New Orleans, where the average rate is sizably lower at $4,310.

Here are the rankings:

1. Detroit, Michigan, $10,723.22
2. New Orleans, Louisiana, $4,309. 61
3. Grand Rapids, Michigan, $4,042.42
4. Newark, New Jersey, $3,525.43
5. Baton Rouge, Louisiana, $3,363.73
6. Hialeah, Florida, $3,271.86
7. Jersey City, New Jersey, $3,266.63
8. Louisville, Kentucky, $3,255.99
9. Miami, Florida, $3,168.75
10. Philadelphia, Pennsylvania, $2,930.53

The study notes that insurance rates are so high that Mayor Duggan has made it a top priority to reduce premiums.

Here is the study’s findings about Detroit:

The Motor City is known for its cars, but its car insurance premiums are the highest in the nation. In Detroit, drivers face high rates because of the city’s high crime rate and Michigan’s no-fault insurance system. Under state law, insurance companies must pay medical expenses, lost wages and property damage regardless of who caused an accident. The system is intended to reduce litigation costs and ensure prompt claim repayment, but many complain that costs have ballooned because lawmakers have not set a cap on claim awards.

Detroit’s annual insurance premiums are not uniformly high.
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We found that even within neighborhoods, Detroit’s annual insurance premiums varied greatly. In the Rosedale Park neighborhood, State Farm offers a policy for $25,300 a year, while Hanover offers insurance for a fraction of the price at $4,854.

  Auto insurance, cars, mayor duggan, New Orleans

Steve Neavling

Steve Neavling lives and works in Detroit as an investigative journalist. His stories have uncovered corruption, led to arrests and reforms and prompted FBI investigations.

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