Thousands of Low-Income Detroit Moms’ Cars Stuck in Impounds — Michigan’s High Insurance Rates the Cause

By Dennis S. Boatwright II

Thousands of low-income metro Detroit moms cannot drive to work because law enforcement officials tow away their cars after they are unable to show proof of insurance, according to Wayne County Clerk records. 

Consequently, these near minimum wage earners lose their only means of transportation and must scramble to find other ways to take their children to daycare and doctor appointments. 

Essentially, thousands of cars bulge through the gates of police impounds because the mothers don’t earn enough money to pay Detroit’s unaffordable car insurance rates. 

For instance, non-Michigan residents are astonished that Michigan drivers pay on average $2,693 annually and are taken aback that Wayne County residents (including Detroit) pay nearly double that rate at $5,646 per year. This means Detroiters, in particular, have to pay the highest car insurance premiums in the nation, even though the Motor City has the lowest per-capita income among large U.S. cities. Detroit’s unbelievable car insurance rate are even double that of Chicago, Los Angeles, and New York City, big cities that also have high concentration of people of color, poverty and crime. 

More directly, the average U.S. citizen pays only $115.00 per month while the average Detroiter pays an astonishing $470.00 each month per vehicle. In real terms, that means most Detroiters are, essentially, paying two car notes every month. 

It is no wonder that 60 percent of Detroit motorists take the chance of driving uninsured.  

Since most Detroiters are unable to pay the premiums, many don’t have coverage. This explains why police impounds are crammed with confiscated vehicles that otherwise can be driven.   

According to 36th District Court records, when a single mom is pulled over for no insurance coverage, her car is impounded and she is written a $200 misdemeanor citation. To get the car back, these distressed mothers are required to show proof of insurance and pay up to $900 in towing and storage fees in order to get the vehicle released from police custody.  

Since most struggling mothers cannot afford adequate insurance coverage nor the dispiriting towing and storage scams, their cars are auctioned away—oftentimes to a police officer–after thirty. 

Since the majority of single-parent moms don’t have the required insurance, a nefarious cottage industry has popped up to feed off Detroiters who cannot pay such crippling premiums (sometimes 40 percent of their monthly incomes). Strip mall insurance brokerage companies like L.A. Insurance and Advasure sell desperate car owners 13- day car insurance policies for $400 ($800 a month). Then the relieved insured catch a ride to the police impound waving an insurance certificate to rescue the vehicle out of car jail, as they call it. Since the insurance policy just last two weeks, this sad cycle repeats itself over and over again. 

To be sure, many are led to believe that car insurance in Detroit is the highest solely because of lower credit scores or high crime rates. (Credit scores are not the biggest spoiler, though in many cases they are privately factored in.) 

Frankly, one reason Detroiters pay high insurance rates is that their political representation is indifferent and relatively weaker than the rest of the nation.   

But there is room for hope. 

Enough state legislators can vote to place a cap on how much an insurance company can charge motorists. If Detroiters want to get their insurance premiums lowered to the national average they must elect and support lawmakers who rank lowering car insurance premiums high on their legislation agendas. So far, only freshman U.S. Rep. Rashida Tlaib (D-MI) considers this an urgent issue and has already made changes to Michigan’s insurance costs that will provide a 10 percent relief to monthly payments.  

However, much more needs to be done and many more lawmakers must be willing to attack this exploitation of poor people. Sympathetic legislators need serious pastors, grassroots educators, and everyday folks to unite and mobilize around this important issue. Otherwise, thousands of more teary-eyed moms will be ordered to “step outside the vehicle.” 

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