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The strange bedfellows looking to bring down Detroit's car insurance rates

wrecked car
Robbie Howell
Flickr - http://j.mp/1SPGCl0
If you're hurt in an auto accident, the personal injury protection part of Michigan's mandatory no-fault insurance will pay all of your medical costs. It's lifetime, unlimited coverage.

Detroit Mayor Mike Duggan and Speaker of the House Tom Leonardof DeWitt don’t appear to have much in common. My guess is that their ballots totally cancel each other out in every election.

But they are together today on something: a plan to drastically cut auto insurance rates statewide, something especially relevant in Detroit.

Detroit has the highest car insurance rates anywhere in the country. Drivers are regularly quoted rates of as much as $5,000 a year for insuring one car. This has led to several developments — none of them good. Detroiters often buy car insurance for a single week when their registration fee is due, and then immediately let it lapse.

That doesn’t work for most people, so they move out of the city, or never move in. The Center for Michigan’s Bridge Magazine wrote a few years ago about a man who moved two blocks, from southern Ferndale to Northwest Detroit, and saw his annual car insurance premium jump from less than $2,000 to almost $4,000.

I happen to know that particular gentleman, who is a civic activist and wanted to run for Detroit City Council. But many other people would just hop back over the line and out of the city. Others live in the city, but pretend they live elsewhere for insurance purposes — with their parents, a sibling, or a boyfriend or girlfriend in the suburbs.

Besides being morally questionable, this has another significant, but hidden effect: Those people cannot vote in Detroit since Michiganders have to vote where your driver's license says you live.

This may have been a significant part of Kwame Kilpatrick’s upset victory over Freman Hendrix a dozen years ago, and is certainly a bigger factor now. It’s easy to figure out why Mike Duggan is so strongly in favor of auto insurance reform for Detroit. That he has managed to enlist Tom Leonard as an ally is a fascinating tribute to his political skill — and also an indication that the term-limited Leonard wants to run for attorney general next year.

But it is very hard to see how this proposal could become law. Senate Majority Leader Arlan Meekhofhas repeatedly said he will kill it, and that even if Duggan and Leonard get the House to pass such a bill, it would be “dead, dead, dead” in the Senate.

Meekhof and Leonard, by the way, do not like each other. Nor has Meekhof, who is from rural Ottawa County, ever shown the slightest sympathy for the city of Detroit. His main causes have been to try and cripple unions and to prevent anyone from making it easier to vote. He also has been strongly against transparency in campaign finance.

Beyond that, however, he seems to genuinely believe that what Duggan and Leonard want to do would amount to illegal price-fixing. Unlike either Duggan or Leonard, Meekhof is not a lawyer. Indeed, he doesn’t have a college degree. But he thinks their plan is illegal, and he probably has the power to prevent it from ever coming to a vote.

There’s a firm belief, however, that Mike Duggan could sell sand in the Gobi Desert. I have no idea how this will play out, but I am convinced it is going to be fascinating to watch.

Jack Lessenberry is Michigan Radio’s Senior Political Analyst. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.

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