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Lansing — Detroit Mayor Mike Duggan pleaded Tuesday with state lawmakers to approve a reduced-rate auto insurance plan he said would save residents of his city $1,000 per vehicle and help more of them get jobs.

Auto insurance premiums of $2,000 to $5,000 per vehicle are double the rate for Detroit’s suburbs and unaffordable for more than half the city’s residents, he told the Senate Insurance Committee.

“God help you if you’ve got two or three cars in the family,” Duggan said. “What’s happening is just economically devastating.”

The Democratic mayor told mostly Republican lawmakers that Detroit police report about 60 percent of the Detroit motorists they stop are driving without insurance coverage. Duggan said the unaffordability of insurance in the city becomes another hindrance for 75,000 unemployed Detroiters needing to have automobiles to get to jobs for which they might apply.

Duggan and Detroit counsel Melvin “Butch” Hollowell appeared before the insurance committee to push for a plan that would give Detroiters an alternative to Michigan’s no-fault insurance system featuring unlimited coverage for treatment of profound, life-altering auto injuries.

It would limit personal injury protection to $250,000 per family for hospital treatment of acute injuries and $25,000 for follow-up care including rehabilitation. Actuarial studies obtained from an independent analyst showed it could cut annual premiums by $1,000 per vehicle, Duggan said.

But representatives of a group called Coalition Protecting Auto No Fault called the plan second-class coverage.

“This is better than nothing, but it’s not much better than nothing,” said Steve Sinas, an attorney with a Lansing personal injury law firm. “Detroiters would have coverage, but it essentially would be worthless.”

There’s no bill for lawmakers to consider yet. One still is being drafted and was to be sponsored by Sen. Virgil Smith of Detroit, who has been removed from committee assignments and Democratic caucus duties while facing charges connected to an incident this month when he allegedly fired rifle shots into his ex-wife’s car.

After missing six sessions, Smith was in the Senate for votes Tuesday but didn’t attend the committee meeting.

Under the Duggan plan, Detroiters would be able to opt for Michigan’s unlimited no-fault plan or their special D-Insurance plan. Their plan would be available as an alternative in any other Michigan city where half or more of the motorists are driving without coverage.

In the cheaper D-Insurance plan, motorists would not pay into Michigan’s catastrophic claims fund and would not have its unlimited coverage for treatment of injuries whose costs exceeded $545,000.

Duggan said when accident victims use up the $275,000 maximum for care covered under the D-Insurance plan, they would fall back on their basic health care plan or pay out of pocket. For many Detroiters, it would mean getting part of their care through Medicaid or hospital charity.

Duggan and Hollowell said their analysis showed personal injury coverage was the main driver of high auto insurance premiums in Detroit, not car thefts or crash damage repairs.

Detroiters injured in crashes file injury claims at twice the rate of their suburban counterparts and the treatment costs double the $30,000 average for suburbanites, they said.

“I can’t say it’s fraud because I haven’t seen it,” Duggan said, adding that it’s more likely “people pushing the very edge of what’s medically justified.”

Duggan’s proposal received support from a United Auto Workers official and Detroit NAACP Executive Director Donnell R. White.

But Sen. Jack Brandenburg, R-Harrison Township, maintained Detroit’s high insurance premiums result mostly from vehicle thefts that are seven times the national average. He said he’d vote for the plan only if all Detroit and Democratic lawmakers are behind it.

GHeinlein@detroitnews.com

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