Detroit Mayor Targets High Auto, Homeowner Insurance Rates

Detroit Mayor Kwame Kilpatrick said he will attack the high cost of auto and homeowner’s insurance in Detroit first by negotiating with the insurance industry.

If that doesn’t work, Kilpatrick said, he’ll have the city file a lawsuit against companies that appear to base rates “just on ZIP codes,” and ignore claims histories or other standards.

Peter Kuhnmuench, executive director of the Lansing-based Insurance Institute of Michigan, said that illegal insurance practices ought to be addressed, but the issue of affordability under Michigan’s no-fault system raises questions about how much to pay for injuries and wage loss. The institute is a lobbying and education organization for the property and casualty insurance industry,

Andy Schor, public-information officer for the state Office of Financial and Insurance Services, said that pricing insurance premiums by territory, however small and seemingly arbitrary, is legal, although that is what some call redlining, which is availability of insurance and is technically illegal.

A state law prohibition against such territorial rating was repealed in the late 1990s, Schor said.

Topics Auto Homeowners