News From The Coalition Protecting Auto No-Fault (CPAN)

LANSING – The independent nonprofit journalism organization ProPublica recently published a report examining auto insurance premiums and payouts in California, Illinois, Texas and Missouri.

The report finds that insurers charged as much as 30 percent more for premiums in zip codes where most residents were minorities, compared to white neighborhoods with similar accident risks or costs.

ProPublica notes that many auto insurers included in the study operate nationally, which means that “minority neighborhoods across the country may be paying too much for auto insurance, or white neighborhoods, too little.”

In response to the story and the issue of auto insurance redlining, the Coalition Protecting Auto No-Fault is calling on the Michigan Department of Insurance and Financial Services to conduct a similar study in Michigan’s urban communities.

“Detroit drivers pay some of the highest auto insurance premiums in the country and insurance companies cannot justify it any longer. It doesn’t make sense that drivers are getting charged significantly more for premiums simply because they live on one side of 8 Mile versus the other, but that’s exactly what’s happening,” said CPAN President John Cornack.

“The person living on the Ferndale side of 8 Mile still is driving the same roads and would be going to the same hospitals, yet the Detroit resident gets charged far more,” Cornack said. “That sounds an awful lot like redlining to me and we are calling on the state to look into it.”

CPAN was formed in 2003 by 26 professional associations that share the belief that it is in the public interest to preserve Michigan’s model no-fault auto insurance system and make sure that the Michigan auto insurance industry keeps the original no-fault promise it made to Michigan citizens when the No-Fault Act became effective in 1973.