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Two days before Gov. Gretchen Whitmer ordered the Department of Insurance and Financial Services to investigate how insurance companies can use credit scores and other non-driving factors in setting rates, throngs of Detroiters gathered at the Northwest Campus of Wayne County Community College District to discuss the issue.

The April 29 town hall convened by Detroit Rep. Sherry Gay-Dagnogo, who has been vocal against any reform that limits benefits for Detroit drivers, featured a panel of experts and then heard jarring stories about how the high cost of insurance is making life unbearable for residents.

That’s why Whitmer needs to go beyond her own executive directive on insurance rates and talk more about the history of redlining that has deprived drivers in Michigan’s largest urban center of equitable rates. Detroit is the epicenter of the battle for this reform, and residents arguably have been the hardest hit.

To add to the groundswell for reform, Whitmer needs to speak more on why it is needed and highlight Detroit's unfair rates.  

“The fact is, while there may be some reasonable differences in premiums based on traffic density and other factors between rural and urban parts of the state, the extreme price spike for people living in certain Detroit ZIP codes goes way beyond actuarial reason and should be stopped,” said Douglas Heller, a national expert on no-fault reform.

“I would like to see the governor hold a press conference on Mack Avenue and make it clear that she will not allow 20 percent, 50 percent, or 100 percent increases for drivers just because they live on the Detroit side of Mack Ave rather than the Grosse Pointe side.”

What is often missing in the debate about the need for reform is how the practice of redlining hurts Detroiters and their ability to enjoy a better quality of life.

“The ugly history of redlining persists, and it is important to acknowledge it and challenge the idea that we have to slice people up by the imaginary ZIP code lines that run down the middle of streets in and around Detroit,” Heller said. “Reducing the amount of premium gyrations between ZIP codes in the broader metro Detroit area would significantly help those living in the city.”

Stephen Sinas, a legal counsel for the Coalition for Protecting Auto No-Fault said the governor’s action could only have impact based on how the Department of Insurance and Financial Services proceeds with the order.

“In order for these efforts to be effective, however, DIFS must consult directly with independent experts on insurance rating issues and consumer protections.  DIFS cannot rely on representatives from the Insurance industry to police themselves,” Sinas said. “DIFS must show it is truly representing the people on this issue and not protecting the insurance industry.”

Gay-Dagnogo, who has been a strong supporter of Whitmer during her campaign said the executive decision is the right step.

“I appreciate that she called for an audit. I think it is important that she uses the executive power that she has over DIFS to ensure that we are getting some true rate regulation,” Gay-Dagnogo said. “We are hopeful that with a new administration that only as we seek to change regulation, DIFS will use its power to review rates and ensure consumer protection.”

There is no doubt that Whitmer can be the reform’s most powerful advocate.

“The governor can use her position and power to focus the reform efforts on changes to our auto insurance laws that truly make auto insurance more affordable and effective for everyone, without depriving coverage and legal rights to those who are seriously injured in an auto crash,” Sinas said. “The problems that exist right now are really the result of the fact that, over the years, our Legislature has failed to demonstrate the wisdom, bravery and courage to implement the right kind of changes to our system.”

bankole@bankolethompson.com

Twitter: @BankoleDetNews

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