What’s the holdup for D Insurance?

When it comes to the issue of D-Insurance, the lower cost auto insurance alternative for Detroiters being proposed by Mayor Mike Duggan, neither side can seem to understand why there is even a debate. Either you see it their way or:

  1. You’re blind
  2. You’re bought and paid for by the other side
  3. You’re stupid

As you might suspect, nothing is ever that simple when it comes to an issue that could fundamentally and substantially change the way that an entire industry does business in the state of Michigan. And when you consider that this is the insurance industry we’re talking about, and how much money is involved when you’re discussing the insurance industry in the state of Michigan, then it gets even more twisted. Now add to that the simmering issues of race, class, and the age-old battle of perceptions and realities pitting Detroit versus everybody else on the other side of 8 Mile Road, and you start to get an idea of why this is not such a clear-cut issue, despite how much both sides want you to believe that it is.
Perhaps one of the best discussions of the topic I heard recently came via an August episode of Detroit Today featuring Stephen Henderson, who was joined by Detroit Corporation Counsel Butch Hollowell, who argued the pros of the issue, versus Michigan State Representative Brian Banks and Conrad Mallett, who serves as chief administrative officer of the Detroit Medical Center.
Both Banks and Mallett have been strongly and vocally opposed to D-Insurance pretty much since the beginning.
In a nutshell, the forces aligned with Banks and Mallett are arguing that D-Insurance is a form of ghetto insurance that wealthy white folks in places like Grosse Pointe Farms and Bloomfield Hills would never tolerate because it places a cap on benefits that doesn’t exist in the current no-fault insurance model that we have right now.
Why should Detroiters be forced to settle for a stripped-down level of insurance that’s only meant for them?
Why not reform the entire insurance model in the state so that it erases the practice of redlining and once-and-for-all eliminates the blatant racial discrimination that has permitted Detroiters to be charged two to three times as much for insurance as their suburban neighbors, even for those residents who have good driving records. Not to mention the highly controversial practice of allowing such factors as credit scores, zip codes, and income levels be factored into insurance rate calculations. New York and California no longer allow credit scores to be used in calculating insurance rates.
In the other corner, those who support Mayor Duggan’s proposal point to the fact that more than half of Detroiters who own cars do not currently have auto insurance, the most likely explanation being because they cannot afford it. They also point out that Michigan is one of the last remaining states to provide no-fault auto insurance, and that it has the highest rates in the entire nation. In Detroit, the poorest big city in that entire nation where more than 30 percent of the population lives beneath the poverty line, and a car remains virtually mandatory for anyone having or seeking employment, residents are saddled with insurance rates that would break the back of an elephant. Shouldn’t they be given a cheaper option? Don’t they deserve an affordable choice? Last week when speaking before the Detroit Chapter of the National Association of Black Journalists (NABJ) Duggan went so far as to accuse those in Lansing who were obstructing his proposal of doing so because they were essentially bought and paid for by the health care industry via campaign donations.
For those who thought I was going to straddle the line and play it safe, here’s where I put that notion to rest.
This is a complex issue with a lot of moving parts, and some of those moving parts are political. And I will concede that those who oppose D-Insurance make some very valid points, particularly about the need for an overhaul of the entire insurance system and an end to redlining. Detroiters have been getting screwed by ridiculously high insurance rates for forever, and although I have read the findings of the recent reports spelling out all the reasons why it’s not just about race and class but more about the considerably higher number of PIP (Personal Injury Protection) claims filed by Detroiters compared to those filed by Detroit’s neighbors, I think most Detroiters would have a hard time swallowing any explanation that suggested race and class – the issue that has been one of the most defining elements in all of Detroit’s history – now suddenly has nothing to do with why they are being screwed by the insurance industry more than anyone else in the state.
Just saying.
But how long has this been going on, though? Did Detroiters just now suddenly become aware of the fact that they were getting a raw deal? And have Detroit legislators just now suddenly decided that this was an issue worth combating in Lansing?
The issue of Detroiters paying exorbitant auto insurance rates has been going on for years, and Detroit representatives have been fighting for justice on this issue for years – and nothing has changed. Not for lack of trying, and not for lack of trying really hard, but the result remains the same. Nothing has happened and more than half of Detroit residents are driving without any insurance, not only because they can’t afford it but because they know their likelihood of going to jail for driving without insurance is relatively low and it’s cheaper to pay the fine if they do get caught.
It’s called ghetto economics, which is nothing more than one big paycheck gamble based on how to achieve the best possible outcome when weighing nothing but bad options. I’m hardly from the ghetto, but I will confess right here and in public that for two periods of time totaling more than one year while a resident here in Detroit I too was ‘driving dirty’.Because I had no other options. And if D Insurance had been around at either of those times I would have signed up so quick that…
Well, suffice to say it would have been really quick. Because like many Detroiters, it wasn’t that I didn’t want car insurance, or that I got some kind of thrill driving illegally. I’m too old for that kind of thrill anyway. I just plain and simple could not afford the rates. But I had to use my car.
There. I’ve said it.
After listening to both sides go back and forth and wave all their facts and figures and statistics, which are certainly helpful to some degree, the one thing that stands out to me more than anything else is choice. Because nobody is saying that if D-Insurance is implemented that D-Insurance is the insurance you must have. It’s not. You’re free to stick with whatever insurance you have if you prefer it, or you can even keep gambling with the law, although that’s not advisable. D-Insurance is a choice. An option. Nothing more, nothing less. But it’s an option that would at least give more Detroiters some insurance they could actually afford.
Secondly, I haven’t heard anyone say – from either side – that if D-Insurance becomes a reality then the fight to straighten out the entire auto insurance mess in Michigan comes to a screeching halt. Redlining still needs to be stopped, and using ridiculous methods such as credit scores to assess rates must also stop. But judging by how long this fight has been going on to bring justice to the insurance industry, I’m guessing this one may take awhile.
But what happens in the meanwhile? Are we supposed to just sit back and say it’s OK for more than 50 percent of Detroit drivers to keep on driving without insurance when there is a possibility for them to at least have something tangible in the meantime that could keep them safe – and legal – while waging the war? How much is a promise to keep on fighting worth when placed next to a viable – even if imperfect – solution that is sitting right there staring you in the face?
Right now we have no fault insurance, and no cap on coverage. For the 50 percent of Detroiters who can afford it, I guess that’s great. But if no-fault is so great then shouldn’t we be wondering why we have the highest rate of uninsured -1 in 5 of all Michigan residents – in the entire country? Because even though Detroiters are shouldering the heaviest burden, the rest of the state is not exactly a role model for the nation. I understand D-Insurance opponents who demand that Detroit get the same rates as the suburban communities, but when you consider that even the suburbs are getting shafted when compared to the rest of the country, is this really as high as we want to aim?
But even if our elected leaders remain determined to persist in the fight for a more equitable no-fault insurance that somehow manages to retain unlimited coverage, what’s wrong with pulling the patient out of the street and giving him a few bandages until the ambulance arrives?


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