  Iheartthed Member Username: Iheartthed Post Number: 2112 Registered: 04-2006 |
Well, at least they are attempting to do something about those ridiculous insurance rates in the city. quote: Read the rest here: http://www.detnews.com/apps/pb cs.dll/article?AID=20077110803 54 | ||
Jt1 Member Username: Jt1 Post Number: 10706 Registered: 10-2003 |
House Bill 5250 has no chance. While this will even out the inequality of insurance rates it will be voted on pretty much older, urban areas against everyone else. No chance of it passing since most will see a vote to support this as a vote to increase their constituents rates. House Bill 4702 should pass by a huge margin since it is just common sense but common sense and Lansing seem to miss each other a lot these days. I am curious by the info about the guy with esurance. I have esurance (2 cars, 2 drivers, no points or violataions) and I pay less then 200 per month. While rates are unfairly high in the city people need to adjust by raising deductibles much higher and take advantage of every option to lower rates. | ||
Dds Member Username: Dds Post Number: 450 Registered: 10-2006 |
quote: That about says it all, wouldn't you think? | ||
Iheartthed Member Username: Iheartthed Post Number: 2113 Registered: 04-2006 |
House Bill 5250 has no chance. While this will even out the inequality of insurance rates it will be voted on pretty much older, urban areas against everyone else. No chance of it passing since most will see a vote to support this as a vote to increase their constituents rates. Yeah, I know. But you can't say that they didn't try... | ||
Jt1 Member Username: Jt1 Post Number: 10708 Registered: 10-2003 |
quote: I'm happy they are focusing on this issue but I just don't see much hope. If it were to pass I expect that downtown/midtown/Lafayette Park, etc would see a sudden 'boom' in population of people that now list their home as their actual address. | ||
Iheartthed Member Username: Iheartthed Post Number: 2115 Registered: 04-2006 |
I'm happy they are focusing on this issue but I just don't see much hope. If it were to pass I expect that downtown/midtown/Lafayette Park, etc would see a sudden 'boom' in population of people that now list their home as their actual address. Definitely. It might also do a bit to stem to outflow of the middle class residents from the non-downtown neighborhoods. | ||
Dougw Member Username: Dougw Post Number: 1977 Registered: 11-2003 |
I agree that 4702 sounds like a no-brainer and I hope it passes. With 5250 I can see both sides of the argument, I'm not sure it's really justifiable. It probably won't pass anyway. | ||
Hans57 Member Username: Hans57 Post Number: 223 Registered: 05-2006 |
Imagine if 5250 did pass, retailers would see the new demographics and be like "holy shit, where did all the white people come from, let's open up." | ||
Jt1 Member Username: Jt1 Post Number: 10718 Registered: 10-2003 |
quote: There would definitely be an demographic shift in wealth and education. I know way too many educated, professionals that 'live' in the suburbs but 'stay' in Detroit. | ||
Diehard Member Username: Diehard Post Number: 190 Registered: 03-2005 |
It'll never happen. The insurance industry lobby is way too powerful for anyone to tell them how to do their business. Especially a bunch of po'folks from the ghetto. | ||
Jt1 Member Username: Jt1 Post Number: 10720 Registered: 10-2003 |
4702 is more changing what we as a state require the insurance companies to cover. Part of the issue with insurance is the companies but the larger issue is the requirements that the State mandates. Reducing those requirements will lower rates but not affect insurers profits since they will have to pay out less. Now if only we can drop the Catastrophic Claim charge applied to every policy. | ||
Lefty2 Member Username: Lefty2 Post Number: 635 Registered: 07-2007 |
I don't understand how population would suddenly change dramatically by car insurance changing. Would people suddenly stopped getting their cars stolen, broken into? Insurance is a probability, statistic, actuarial business. They have to charge someone. Should they charge people in Grand Rapids for what happens in Detroit, or for life Ins., charge someone 20 Y.O. the same as a 70 Year old. Doesn't make sense. | ||
Jt1 Member Username: Jt1 Post Number: 10729 Registered: 10-2003 |
quote: You missed the point. The true population would not change dramatically but there would be an increase in people that live in Detroit but claim an address elsewhere now claiming their real Detroit address. My guess is that anywhere from 25%-35% of people in downtown/midtown list other addresses as their residence for insurance sake. quote: First, until 96 it was by county until the Engler administration and Lansing changed it to zip code. The second bill listed would put it back to 1996 info. It would not be a statewide pool. Secondly, you can claim that the business is based upon true actuarial data but neither the State nor the insurance companies make that data available. The insurance companies don't even supply the data to the state to be audited. The system is built to allow corruption and bias. If as you state it is based purely on numbers why do I pay $2400 a year through esurance but was quoted at $11000 a year by AllState and $7000 per year by State Farm? An industry based solely on numbers would not have discrepancies that large. | ||
Thejesus Member Username: Thejesus Post Number: 2683 Registered: 06-2006 |
"First, until 96 it was by county until the Engler administration and Lansing changed it to zip code. The second bill listed would put it back to 1996 info. It would not be a statewide pool." jt1: Are you saying that H.B. 4702 will price rates by county? | ||
Jt1 Member Username: Jt1 Post Number: 10732 Registered: 10-2003 |
quote: That's what I said but I put in the wrong bill. 5250 changes how the pricing would be structured and I believe would revert back by county. That is why i don't believe it has any chance to pass. | ||
Thejesus Member Username: Thejesus Post Number: 2686 Registered: 06-2006 |
I don't see anything in 5250 about it being priced by counties either...but it does contain the section below...is this what you're referring to? (7) Beginning 1 year after the effective date of this subsection, if an insurer can demonstrate to the commissioner, after an opportunity for an evidentiary hearing held pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, that clear and significant financial impairment exists in the geographic territory or territories in question because of the need for an additional territorial base rate, or for a greater variance in the adjacent geographic territory differential contained in subsection (5)(c), the additional territorial base rate or a greater variance, or both, shall be permitted for use by the insurer or a licensed rating organization on behalf of that insurer, at such time as the need exists. Evidence shall not include financial impairment resulting from exemptions granted to other insurers. | ||
Thejesus Member Username: Thejesus Post Number: 2687 Registered: 06-2006 |
Yeah, I don't think that's right...5250 basically limits the factors that insurance companies can use to price their rates by the following (i) Either the age of the driver; the length of driving experience; or the number of years licensed to operate a motor vehicle. (ii) Driver primacy, based upon the proportionate use of each vehicle insured under the policy by individual drivers insured or to be insured under the policy. (iii) Average miles driven weekly, annually, or both. (iv) Type of use, such as business, farm, or pleasure use. (v) Vehicle characteristics, features, and options, such as engine displacement, ability of vehicle and its equipment to protect passengers from injury and other similar items, including vehicle make and model. (vi) Daily or weekly commuting mileage. (vii) Number of cars insured by the insurer or number of licensed operators in the household. However, number of licensed operators shall not be used as an indirect measure of marital status. (viii) Amount of insurance. There's really nothing about counties or geographic boundaries except for the opportunity for the insurance companies to demonstrate the need for a rate based on geography at an evidentiary hearing (Message edited by thejesus on November 09, 2007) | ||
Jt1 Member Username: Jt1 Post Number: 10733 Registered: 10-2003 |
tj - I may be wrong about the county thing. It looks like you have read through it in more detail than I have so I will defer to your interpretation as being correct. | ||
Thejesus Member Username: Thejesus Post Number: 2691 Registered: 06-2006 |
I haven't read it in detail yet...I just skimmed it after I saw this thread... But assuming it does become a statewide pool, would that change your opinion of it any? I see the merits on both sides of the argument but, using the example posted above, it just seems extreme for the people in Grand Rapids or even in places like Marquette to have to pay more due to the amount of auto theft that occurs in Metro Detroit. | ||
Johnlodge Member Username: Johnlodge Post Number: 3505 Registered: 10-2003 |
"The ZIP code bill was created in July to put territorial rating back into place, which would set rates by county rather than ZIP code." Seems to me this just means the rates in the rest of Wayne County will go up, and Detroit may see a small drop. | ||
Erikd Member Username: Erikd Post Number: 935 Registered: 10-2003 |
quote: This statement from Lefty2 is a perfect example of the ignorant mindset that prevents rational discussion of this topic. Any discussion about auto insurance rates in the city is simply dismissed with a comment about car theft, as if it was the only factor in determining insurance premiums. All this ranting about auto theft in Detroit is just a pretext for the justification of insurance redlining in the city. In Michigan, there are three types of auto insurance, each offering completely different coverage. The State of Michigan requires PLPD, sometimes called "no-fault", coverage. PLPD provides coverage for persons injured in an accident, and it also covers property damage resulting from an accident. PLPD does NOT cover vehicle theft, nor does it cover vehicle damage resulting from an accident. In addition to the state required PLPD coverage, Michigan drivers can choose to pay for Comprehensive coverage and/or Collision coverage. Comprehensive coverage insures your vehicle for theft, fire, vandalism, and break-ins. Collision coverage insures your vehicle for crashes and accidents. ---------------- Due to the fact that the city of Detroit has relatively more auto theft than most of the suburban communities, it makes perfect sense that Detroiters should pay more for Comprehensive (fire and theft) coverage. Due to the fact that Detroit suburbs have relatively more traffic accidents than the city, (all of top ten most dangerous intersections, with the most traffic accidents, are located in the suburbs) it makes perfect sense that Detroiters should pay less for Collision coverage. ---------------- Detroit city residents don't want special treatment from the insurance companies, we want FAIR treatment from the insurance companies. We should pay more for comprehensive coverage, but we should also pay less for collision coverage. | ||
Craig Member Username: Craig Post Number: 416 Registered: 02-2007 |
Insurers, like lenders, calculate the risk associated with any given prospective customer based upon a wide range of criteria. These are industries without set criteria other than imperatives to not include factors pertaining to race, religion, etc. Variations are found in the calculations across firms because the inputs might vary and weight given to these will also vary (e.g. is a record of bankruptcy a bad thing or a very bad thing?). So, there's no single formula. Providers, though, are consistent in their read of the risk in Detroit zip codes because...there's a hell of a lot of risk in Detroit. Gabe Leland (carpet-bagger from Lansing, btw) is right in claiming that insured people in Detroit are being robbed, but it's other Detroiters who are doing the robbing. If a provider could offer rates substantially lower than the "robbery" rates charged by the mainstream and still make money this hypothetical provider would and thereby capture the market. That this hero has not arrived is evidence of the horror of Detroit vs. sleepy little burgs outside of the City. I've spent some time in this industry and I know that the bad old companies are always twisting the numbers in new ways in order to find price solutions for gaining market. Every consumer has green money and the industry is willing to compete for Detroit's, but they won't play if there's no hope for profit. | ||
Jt1 Member Username: Jt1 Post Number: 10747 Registered: 10-2003 |
Craig - Here is a question I posed earlier that really questions the integrity of the insurance industry: quote: I have done much digging and the industry and pricing has almost 0 oversight from the state and does not/will not supply their actuarial data to the state or consumers. No business that refuses to divulge it's acturial data can be defneded as being honest based upon the data. | ||
Craig Member Username: Craig Post Number: 417 Registered: 02-2007 |
JT - I understand the sentiment, but in my professional experience the drive is to find advantage within available data to support lower rates, e.g. statistically fewer high-cost claim history, incidence of lightening strikes, etc. Truthfully, if the "books" were thrown open to the public I doubt that there would be any change in the thinking of the industry. It really is about the money, and this is a competitive industry where a firm cannot play 'company store'/monopolist with pricing and expect to stay in biz. Why dosn't the industry share its data & logic? Trade secrets. I understand how the "screwed" people of Detroit & other high-rate areas might view this with skepticism, but it really is what I've seen. Formulas are guarded from competitors the way that a card player hides his hand. Your experience? Possibilities: 1) different cost structures of the providers means that one can offer a lower price while maintaining a profit, 2) one or more providers feel luckier about you than do the others (e.g. no way that THIS guy is going to get robbed...) 3) the bargain supplier missed something frightening about your neighborhood or your personal history (don't laugh - data are only data and some things get fouled up via flawed match algorithms). Reform? Short of street criminals finding Jesus the fundamental risks of Detroit will not change and so you can look forward to continued high rates. A NFW dream - a benevolent billionaire or church sets up a purely non-profit provider and thereby does not price in order to meet 20% ROI targets. More realistic option - risk calculated via census tract (which may already be in place, anyway). | ||
Urbanpioneer Member Username: Urbanpioneer Post Number: 6 Registered: 10-2007 |
Insurance rates in the city are crazy --- crazy to the point that when I was thinking of leasing a new truck I quickly said no way when I realized the insurance would jump from roughly $1,200 a year for my 86 F-150 to about $4,000. Yes, I could register it somewhere else, but that's not right, and if the car would get totalled or stolen, I'd be nailed for fraud an my insurer wouldn't pay. Still, I think there are real reasons Detroiters do pay more for auto insurance _ I think they have more to do with poverty than anything else. I think Detroiters are more quick to file claims (I know this sounds bad, but nearly every time I go to the Family Dollar people in line talk about waiting for their insurance settelement checks); Detroiters are less healthy, as a result, the health care costs are higher after an accident; the streets of Detroit are nuts --- people blow lights, speed, drive like mad men, physically the streets are in bad shape, poor visibility due to down lights, missing street signs etc; and Wayne Coutny juries are generous. And, as other posters said, for Detroit rates to go down, the insurers will have to make money elsewhere by jackiing up rates for other drivers. I also have to ask this question: If all the insurance companies are red-lining and then one applies the capitalistic principal, why doesn't one company just come in with low-rates and make a killing? | ||
Craig Member Username: Craig Post Number: 418 Registered: 02-2007 |
UrbanP - capitalism/'corporate greed'= guarantors of the best available rates. Very ironic if one considers the depth of the redlinning myth. |
