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Riding dirty: Who are the real car insurance criminals?

By Phreddy Wischusen
Special to the Michigan Citizen

I am a criminal.

I have a car but no insurance.

After my beloved truck broke down, I was carless for 16 months in the Motor City — hustling rides, waiting for buses and cabs that never showed, popping bike tires in gaping potholes at 3 a.m. in neighborhoods with no working streetlights.

During this time, I let my old car insurance policy expire without renewing it. Why would I renew it? I had nothing to insure. Last December, I bought a 1998 Honda Civic for $2,300 in cash. I headed straight to a side-by-side Secretary of State and LA Insurance office. What a joy to drive again! But this time, I was going to get it right. Buy auto insurance. For real. I’m 33 and making steady money. Maybe now is the time for the real symbol of American adulthood: FULL COVERAGE.

Confident of my driving record, I asked for the amount of minimal coverage.

“$387,” she told me.

A MONTH?!

“That’s right. You can pay $2,322 today or pay $1,200 down today and $1,122 in two months.”

“WHAT?!!! That’s more than the price of the car.”

She responded, “You live in Detroit.”

And that’s when I found out the secret that everyone knows. Insurance companies charge Detroiters double what they charge suburbanites for the exact same services. And it’s mandated by law.

“We don’t make the prices. The insurers do, most of which are headquartered out of state,” I was told.

To add insult to injury, she continued, “Also policies cost more if you haven’t been insured for a while, even if you didn’t have a car.”

Which means in addition to the geographic penalty, there is a poverty penalty. And there was nothing she can do about it.

I couldn’t afford any of that. But I needed proof of insurance just to get a license plate. I felt defeated, impotent and trapped. On the day I should have been celebrating my hard-earned purchase, my four wheels of freedom, I was about to cry onto the two-inch-thick bulletproof glass separating me from a woman I had just met.

She tells me about one last option, the seven-day policy. A seven-day policy is insurance coverage for just seven days. People buy it so they have something to show the Secretary of State when they renew their tabs. They drive with an easy mind for the following six days. Then for the rest of the year they drive with one eye on the rearview mirror.

I gave her $250 bucks. She gave me a piece of paper that said I had car insurance for a week. The company underwriting that worthless seven-day policy just got a big chunk of my hard-earned money for free so I could get a license plate.

After months of riding dirty, I’m sick of being paranoid every time I get in the car. So like all outlaws, I consider committing a couple more crimes on my path to getting straight. The same crimes most of my friends in the city commit. Insurance fraud. Tax evasion. I go to another agency to find out the cost if I have a suburban address.

Turns out he can get me a “friends only” deal. $1,890 for 6 months in Detroit.

And if I “move” to Ferndale? $1,022 for six months.

Ferndale and Detroit are separated by a single road. That means by living on the south side of the street, I pay $145 a month — 85 percent — more than if I lived on the north side of the street. For the same “product.”

So, youngsters from the suburbs rent houses and apartments in the city. Go to college in the city. Drink in city bars. Eat in city restaurants. Post on Facebook and Twitter about how meaningful it is to participate in Detroit. But according to their driver’s licenses, they actually live in Ferndale or Rochester Hills, Livonia or Romeo.

Because of that “little white lie” they don’t pay city income tax. How many millions of tax dollars are lost to the city because people keep suburban addresses to avoid exaggerated insurance costs? And for a city in “financial emergency,” paying taxes is a big deal.

Many born-in-Detroiters lack access to a fraudulent address. Which means residents of one of the poorest cities in the United States have no choice but to pay the nation’s highest auto insurance rates or go without it.

According to the State of Michigan’s Web site, “If you own a car and you drive it, or allow someone else to drive it without basic no-fault insurance, you can be sued and held personally liable. You may also be convicted of a misdemeanor and fined from $200 to $500 or put in jail for up to one year, or both.”

This effectively criminalizes Detroit residents. Ever since the virulent racist and ruthless profiteer, Henry Ford, ripped out the street rail system, Detroiters have needed cars to get around. One third of Detroit residents live below the poverty line ($23,550 for a family of four in 2013). The median income for a household of four in the city is $26,098. That means the average family in Detroit makes just about $212 a month more than what is considered poverty and the insurance price quoted to me for one car is equivalent to 15 percent of the average Detroit family’s yearly income. People living at or close to poverty cannot afford 15 percent of their income for something that provides them with entirely no tangible value.

In fact, if you subtract my quoted yearly price of $3,780 from the Detroit median income of $26,098, you get $22,318 (below the poverty line), so it could be said that car insurance rates are keeping the average family in Detroit living in poverty.

At minimum coverage, if your car gets stolen/wrecked, you’ll still have to pay the insurance for a car you no longer have.

Additionally, although I’ll save the discussion on racial profiling in police traffic stops for when an insurance-less driver gets pulled over, it can set off a chain reaction that can ruin lives. High-priced tickets. Suspended licenses. Driver’s Responsibility fees. For poor people, the same inability to pay for insurance renders them unable to pay state-mandated fines for not having insurance.

Inability to pay can lead to jail time. Jail time leads to loss of work and to the inability to support their families. According to recent statistics, most families in Detroit are single parent families. The absence of a parent for one night or even a few hours due to arrest can be traumatic and dangerous for a child. Let alone weeks/months. I’d be interested to see some research on the instances of incarceration originating with insurance-related offenses in the city. I’d bet there are so many correlations. This state-mandated criminalization of poverty and city residents doesn’t just affect Detroiters and the poor, it destabilizes countless families, which increases crime and social ills of all kinds for our whole region. Is it a surprise to you that America’s poorest cities are the most violent and crime-ridden?

Why not just do without a car? Go green and ride a bike? Most people I know work in an entirely different community from where they live. Some neighborhoods have decent grocery stores and health services but many in the massive 138-square mile city don’t.

I can ride my bike eight miles in about 30 minutes. On average, it takes me one hour and 45 minutes to make the same trip on the city bus system. Bikes are great but not in the rain, snow or with groceries. Not to arrive at a professional job free of sweat, without grease on your pant leg or wrinkles on your shirt. Not to transport children. The #12 Conant bus I take stops running at midnight; I get off work at 3 a.m. A car is the only consistent way to traverse the sprawling “motor city.”

Meanwhile, the law-abiders strengthen the companies to oppress us even more. Massive unregulated profit levels allow insurance companies to spend huge amounts on lobbyists and political campaigns. Corporations then entrench their privileges in laws.

Last week, State Rep. Peter Lund, R-Shelby Township, introduced a bill into the legislature to cap Michigan’s unlimited personal injury protection at $1 million ostensibly to lower insurance rates. Under the proposed plan, the savings would be $125 a year.  That would make my quoted monthly Detroit insurance rate fall from $315 to $305. YIPPPEEEE! Wow, I would save $10 a month. But if I am in a catastrophic crash, I might just find myself on the hook for tens of thousands of dollars of medical bills. Thanks for looking out, Pete! By the way, 33.7 percent of Peter Lund’s campaign financing in the election he won last November came from the insurance industry alone.

Why haven’t the American Civil Liberties Union and the NAACP done something about this? Don’t they have skin in this game?

Separate rates for equal cities is inherently unequal. For a city where 82.7 percent of the population is Black, the insurance rate disparity is overtly racist. If not deliberately racist in its intent, then definitively racist in its execution. It increases the friction between city-folk and suburbanites. It effectively steals much needed taxes from the city. It encourages fraud over honesty. It rewards the rich and penalizes the poor.

So what to do?

First of all, if you live in Detroit but your legal address is in the suburbs, e-mail the state legislators in your suburban district. Remember the words of Martin Luther King Jr., “Injustice anywhere is a threat to justice everywhere.” Make legislators statewide (if they haven’t been bought out by the insurance companies already) know this problem affects us all. Then change your freaking address and pay your darn taxes.

Secondly, since the government forces all drivers to buy from insurance companies, it should force insurance companies to make coverage affordable for all drivers.

The governor could encourage the creation of a nonprofit that offers low cost insurance.  Michigan insurance companies collected over $2 billion more than they paid out in claims in 2011. I imagine that $2 billion would bring down insurance prices for Detroiters a great deal. Such a nonprofit would provide more new jobs for Michiganders, and get more people insured. I think city tax revenues would increase immediately and taxpayer funded court/jail costs would decrease.

I’m sure there are wiser people in this city with better ideas about how to deal with this injustice than me. Speak up! Please! And if you already are, speak even louder! We all need your help. We all want to be legal and law-abiding; it is so much less stressful.

Until we do find the right solution, I, however, will be riding dirty. And driving with one eye on the rearview mirror.

 

 

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