Detroit has had quite a bad stigma for many years as being a rough and tumble place. Apparently that is reflected in the city’s auto insurance rates, which are some of the highest in the nation. The average resident pays well over $5,000 a year, according to Crain’s Detroit Business, which has pushed many residents to outlying areas.
This has lead newly elected mayor, Mike Duggan, to propose the idea of a city-owned auto insurance company. Reactions are decidedly mixed, though many support the mayor in pursuing this option. Duggan developed a company at Detroit Medical Center that lowered costs for physicians, so he has the know-how to get the job done. But critics discount that he has the funds to do so.
The state of Michigan requires auto companies to provide documentation of solid funding and business planning, along with a minimum of $7.5 million in capital. If attempted, Duggan’s brainchild could bring many residents back to Motor City. But for cash-strapped Detroit, it might be too little, too late.
[via Crain's Detroit Business]