Car insurance in Detroit is wildly, astoundingly expensive. The most expensive in the country, in fact, with an average policy for one vehicle coming in around $3,000 to $5,000 a year. And that’s the average.
The Free Press dispatched a reporter to Cleveland recently to examine the disparity between rates in Detroit and our lovely hamlet on the shores of Lake Erie. At the heart of the wide gap between the two cities — Cleveland boasts rates thousands less than its counterpart in Michigan — is that state’s no-fault law, literally the only of its kind in the country, that requires all drivers to purchase insurance with coverage for potentially unlimited damages.
Still, the Freep came to Cleveland to ask around about our rates, whether we think they’re burdensome or affordable, etc. to put the Motor City boondoggle into perspective.
And they found a poster child for the cavernous gap between rates in the two cities in former Cleveland city councilman Zack Reed. A sub-$100 a month policy in Detroit is basically a unicorn. Meanwhile, Reed, who has three DUIs on his record, drives a 2008 BMW, and lives in a moderately crime-afflicted area of Cleveland, is far from alone in having a policy for less than a Benjamin Franklin a month. And that is flabbergasting to Detroiters.
From the Free Press:
Zack Reed, 55, who was on Cleveland City Council from 2001 until late last year, said that car insurance never came up as a big issue during his time in office.
“I was on council for 17 years, and in my 17 years I can tell you that I have not heard one complaint that’s ever come to me based on car insurance,” Reed said.
Reed’s own driving record isn’t perfect. He was convicted of his third DUI in 2013. Following that, the cost of insuring his 2008 BMW jumped to $151 a month. Now five years later, his monthly rate is back to double digits.
“I pay less than $100 a month and I live in a neighborhood that people would say is somewhat crime-ridden,” Reed said. “My insurance cost is lower than my cable.”
Does anyone in Ohio pay Detroit rates? Yes. Four people.
That is the number of drivers in Ohio’s last-chance auto insurance program for those whose driving records are so atrocious, no commercial insurer will take them.
Yearly premiums for this Ohio Automobile Insurance Plan run about $4,000, said Dean Fadel, the program’s manager.
“We’ve only got four people in the plan,” said Fadel, who is also president of the Ohio Insurance Institute, a trade group. “Our last-resort mechanism may be even cheaper than what your regular mechanism is” in Detroit.