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Wed June 8, 2011
Legislation seeks to reduce urban car insurance rates
A Detroit lawmaker thinks he has the answer to that city’s high rate of uninsured drivers.
State Senator Virgil Smith wants to create a pilot program that would allow Detroit drivers to sign up for bare-bones insurance policies with reduced rates. The idea is to cover medical costs up to $50,000 a person, or $100,000 an accident. Right now, the state’s no-fault law requires unlimited personal injury coverage. Smith says that’s hampered efforts to reduce urban insurance rates.
"Insurance companies have been stating to me for the past six, seven years that the medical side of the no-fault law is killing them, and if they had some relief they could offer policies at a reduced rate to the citizens of Detroit, or citizens of urban areas."
Smith’s bill would create a five-year pilot program to test whether companies will sell the policies, and whether drivers will buy them.
The cost of auto insurance in Detroit is so high that many people drive without it. Smith says it's also one reason many people move out of the city.