Detroit car insurance: 6 other factors behind the cost of auto insurance

May 07--Detroit drivers face the highest average insurance rates for cars and other vehicles in the country, often more than $3,000 a year for a single automobile.

A Detroit Free Press investigation finds that runaway medical bills, disability benefits payouts and lawsuits under Michigan's one-of-a-kind, no-fault insurance system play a key role in driving up costs for drivers.

Find out what's behind the high cost of auto insurance in Detroit -- and what steps could be taken to help fix the problem.

While no-fault lawsuits, large medical bills and benefits payouts are major factors in why Detroit residents pay higher auto insurance premiums than others in Michigan, they aren't the sole explanations. Here are additional factors.

Motor-vehicle theft: Detroit led Michigan with 5,113 incidents of vehicle theft in 2015, which was 35% of all such incidents that year statewide, according to Michigan State Police data. Figures for 2016 were not yet available.

Carjackings: Carjackings have been on the decline but remain a problem. Detroit Police reported 382 carjackings last year, down from 532 in 2015 and 782 in 2013.

Crashes/congested roadways: Because of higher traffic volumes, Detroit has more accidents on its highways and roads than other Michigan cities and rural areas. Detroit had 22,833 crashes in 2015, about 8% of all reported crashes in Michigan, according to the Michigan Traffic Crash Facts database.

Credit scores: Auto insurance companies use a variation of a motorist's credit score when setting rates. That controversial practice hurts residents of cities with high poverty rates, such as Detroit.

Lack of private health insurance: Detroit residents are more likely to use the medical-benefits portion ofno-fault auto insurance policies than residents in many suburbs. That is because no-fault becomes the primary payer for crash-related medical bills for residents who use Medicaid or Medicare -- and it's the only payer for those who lack health insurance completely. An estimated 56% of Detroiters in 2015 were on Medicaid or Medicare, and 10% lacked any health insurance, according to the U.S. Census Bureau's American Community Survey.

ZIP codes: Auto insurers use residential ZIP codes when setting rates, to contain the costs of claims to the areas where people who generated claims live.

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