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It's not unusual for residents in Detroit to pay ridiculous car insurance rates, often between $3,000 and $5,000 a year. Some people simply get the insurance so they can get a license, then cancel it right after.
The prices are outrageous and often unaffordable for many residents. If those rates applied in the suburbs, it's likely many folks there would also be driving without insurance.
Detroiters pay the third highest rates in the nation.
A Detroit Free Press investigation by JC Reindl shows that runaway medical bills, disability benefits payouts and lawsuits under Michigan’s one-of-a-kind, no-fault insurance system play a key role in driving up costs.
The Freep probe found:
Lawsuits surge: The number of lawsuits generally filed by motorists and passengers in accidents who are seeking benefits from their own auto insurance companies — called first-party lawsuits — have nearly quadrupled in Wayne County since 2004, even as accidents drop. They now comprise more than two-thirds of the lawsuits in the state.
High medical bills: Some MRI centers that appear frequently in no-fault lawsuits in metro Detroit charge as much as $5,300 for an MRI that would cost less than $1,000 at other facilities or about $500 under Medicare. People involved in accidents, who are often free to go to any provider, sometimes get steered to specific centers where the billing is higher. Plaintiffs in accidents will visit medical providers for months on end to bolster separate negligence lawsuits against drivers of the other vehicle.
Pricey personal care: Some doctors routinely declare people disabled for months after seemingly minor accidents, providing an opportunity for relatives or friends to get paid hundreds of dollars a week for attendant care to help with basic needs such as meal preparation and dressing. Medical transportation services routinely charge auto insurance companies $100 to almost $200 a day to shuttle no-fault patients to and from a single medical appointment — even one just 2 miles away.
Soliciting victims: It's illegal in Michigan to solicit people who have been in accidents for commercial purposes, such as legal services or physical therapy, within 30 days of the car crash. But in a review of hundreds of lawsuits filed in Wayne County, the Free Press found multiple examples of people being solicited within hours or days of an accident.
No fraud watchdog: Michigan — unlike many other no-fault states — has no dedicated no-fault insurance fraud watchdog. Other states such as Florida have contained medical costs by aggressively pursuing fraud in urban areas.
