Why Detroit is the most expensive city in America to buy car insurance

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ASK Mike Duggan, the mayor of Detroit, what keeps him up at night and he replies, without a second’s hesitation, “car insurance”. For those familiar with the city’s precarious finances, bad schools and blighted neighbourhoods, this might seem a strange answer. But even among this throng of flashy ailments, Detroit’s car-insurance problem looks egregious. The average cost of insurance premiums in the city is $5,414 per year, more than twice the state average and nearly four times the national average. For the typical Detroit household, making $26,300 a year, this would represent 21% of pre-tax income. Cars are an inescapable necessity in Motor City, a 140-square-mile expanse lacking robust public transportation. Residents therefore flout the law by registering their policies at addresses outside the city, where insurance costs less than half what it does inside, or by driving without any insurance at all. Good numbers are understandably difficult to...Continue reading

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