Detroit readies for new residents "city’s decades of population decline is reversing”

[Hermod]

Probably a decent number. It's something that needs to be seriously addressed. Not a crack down on individuals dodging insurance and taxes, but a track down on the high rates of insurance along with lowering of taxes. One of the typical benefits of city living is that you can lose the car and auto insurance because public transport. That sadly isn't possible here, so something needs to be done.

Casscorridor Auto Insurance Company sounds like the solution to low rates in Detroit. Have at it and find some investors for your brilliant scheme. DYes just loves to spend other people's money.

[casscorridor]

Casscorridor Auto Insurance Company sounds like the solution to low rates in Detroit. Have at it and find some investors for your brilliant scheme. DYes just loves to spend other people's money.

The scheme of aligning insurance costs closer to the national average is achievable through an act of the state legislature and would result in significant overall savings for consumers. Keep in mind it's not just Detroit, but Michigan in general, which has by far the highest insurance rates of any state. As for government public transport spending, it has been well established that public infrastructure spending pays for itself many times over through increased economic activity.

[Cincinnati_Kid]

Probably a decent number. It's something that needs to be seriously addressed. Not a crack down on individuals dodging insurance and taxes, but a track down on the high rates of insurance along with lowering of taxes. One of the typical benefits of city living is that you can lose the car and auto insurance because public transport. That sadly isn't possible here, so something needs to be done.

Good point. That's why Detroit is so woefully behind cities like Atlanta, Dallas, Philly, NY, Chicago etc.. because of the lack of mass transit. The M1 is a start I guess, but it won't connect the whole region. Insurance rates, along with a crumbling infrastructure are killer's here in Michigan.

[Hermod]

The scheme of aligning insurance costs closer to the national average is achievable through an act of the state legislature and would result in significant overall savings for consumers. Keep in mind it's not just Detroit, but Michigan in general, which has by far the highest insurance rates of any state. As for government public transport spending, it has been well established that public infrastructure spending pays for itself many times over through increased economic activity.

It all has to be paid somewhere. If you subsidize unsound rates for selected customers, it is only achieved by raising rates for customers elsewhere in the insurance system who are pretty low risks. Detroiters get charged extra because of the prevalence of unlicensed drivers, uninsured drivers, carjackings, car thefts, vandalism, etc within the Detroit zip codes.

[mwilbert]

It all has to be paid somewhere. If you subsidize unsound rates for selected customers, it is only achieved by raising rates for customers elsewhere in the insurance system who are pretty low risks. Detroiters get charged extra because of the prevalence of unlicensed drivers, uninsured drivers, carjackings, car thefts, vandalism, etc within the Detroit zip codes.

That is true, but that doesn't mean that the specific geographic and other breakdowns the insurance companies use to do ratings are appropriate.

In any case, what I would actually like to see is that the state mandate more transparency about loss ratios for insurers in the various parts of the state. particularly Detroit. Right now there isn't really any way for an outside observer to tell if the pricing is reasonable or not.

[Honky Tonk]

That is true, but that doesn't mean that the specific geographic and other breakdowns the insurance companies use to do ratings are appropriate.

In any case, what I would actually like to see is that the state mandate more transparency about loss ratios for insurers in the various parts of the state. particularly Detroit. Right now there isn't really any way for an outside observer to tell if the pricing is reasonable or not.

Let's say it's not... now what?

[mwilbert]

There are probably three things that could happen if the rates were shown to be unreasonable.

1) Political/public opinion pressure on the companies to lower rates based on that unreasonableness.

2) New entrants to the insurance market based upon the now-revealed profitability of the market.

3) Action by legislators/state insurance regulators. I'm not sure why state insurance regulation is weak; it might just be the regulators, or it might be the statutes they operate under.

[Honky Tonk]

There are probably three things that could happen if the rates were shown to be unreasonable.

1) Political/public opinion pressure on the companies to lower rates based on that unreasonableness.

2) New entrants to the insurance market based upon the now-revealed profitability of the market.

3) Action by legislators/state insurance regulators. I'm not sure why state insurance regulation is weak; it might just be the regulators, or it might be the statutes they operate under.

Actually, none of the above. For one, they have a captive audience, they can charge what they like. Two, in a city where car theft, car vandalism, hit and runs, and insurance scams are a way of life, are you sure the high rates are actually the fault of the big, bad, evil insurance companies? 27 smash and grabs in one night, and that's just the tip of the iceberg. It's easy to whine and cry foul, hard to address the real issues. Do you feel people in more crime free areas should pay higher premiums so Detroit can have "equal" premiums? Do you work in Detroit for minimum wage just to say "I work in Detroit"? Then why would anyone want to insure Detroit motorists @ the same premium level when it's a known higher risk and loss?

[mwilbert]

Actually, none of the above. For one, they have a captive audience, they can charge what they like. Two, in a city where car theft, car vandalism, hit and runs, and insurance scams are a way of life, are you sure the high rates are actually the fault of the big, bad, evil insurance companies? 27 smash and grabs in one night, and that's just the tip of the iceberg. It's easy to whine and cry foul, hard to address the real issues. Do you feel people in more crime free areas should pay higher premiums so Detroit can have "equal" premiums? Do you work in Detroit for minimum wage just to say "I work in Detroit"? Then why would anyone want to insure Detroit motorists @ the same premium level when it's a known higher risk and loss?

The whole point of your question, I thought, was what might happen if in fact the rates were found to be unreasonable--that is, if the current rates were not justified by the loss experience. If they are justified, your objections make sense, but they don't make sense in the context of your question.

[Hermod]

That is true, but that doesn't mean that the specific geographic and other breakdowns the insurance companies use to do ratings are appropriate.

In any case, what I would actually like to see is that the state mandate more transparency about loss ratios for insurers in the various parts of the state. particularly Detroit. Right now there isn't really any way for an outside observer to tell if the pricing is reasonable or not.

If the rates being charged in Detroit were "unreasonably high" and an insurance company thought they could make a profit selling auto insurance [[or property insurance) at a "reasonable rate" in Detroit, the rates would quickly come down.

[mwilbert]

That is certainly possible [[you may be underestimating the potential for collusion or simple lack of courage or expertise in the particular type of insurance market) but because of the non-transparency of the loss experience in Detroit, potential new entrants don't know whether the market would be profitable or not, which is one reason I'd like that information to be available. It would make it a lot easier for new entrants to determine if they want to be new entrants.

[iheartthed]

Not really. New condos in greater Downtown aren't [[generally) existing housing being renovated. They are conversions from non-housing uses, or occasionally new construction.

You don't just need adequate prices to create renovated housing. You need a stock of houses waiting to be renovated. There was basically never any housing downtown, so there isn't anything there to fix up. If there were still a lot of houses in Brush Park, you would probably see them being renovated now, but they aren't there to renovate, unlike in Corktown or Virginia Park.

I'm not sure I understand. Is the selling price per foot not higher [[highest?) in downtown and midtown multi-unit buildings?

[mwilbert]

I'm not sure I understand. Is the selling price per foot not higher [[highest?) in downtown and midtown multi-unit buildings?

I imagine it is. That wasn't the problem with the idea. The issue is that we were talking about what neighborhoods might experience a lot of housing renovation, and you aren't going to see it downtown, because there wasn't any housing there to renovate. The same is true, to a lesser degree, in midtown. What you mostly see downtown and in midtown is residential conversions, or to a lesser extent new construction, which are great, but which aren't renovating existing housing.

If you want to see renovation, you have to see adequate prices in a neighborhood where there are a fair number of salvageable residential buildings. As I mentioned earlier in this thread, prices seem to be high enough in the University District, but while there are some distressed houses, it is a pretty limited supply, and some of them have already been renovated or are in process. It seems like the same thing is happening toward the western end of Boston-Edison, which looks better [[to me, anyway) now than it has in a long time, so I assume people are fixing stuff up.

[iheartthed]

I imagine it is. That wasn't the problem with the idea. The issue is that we were talking about what neighborhoods might experience a lot of housing renovation, and you aren't going to see it downtown, because there wasn't any housing there to renovate. The same is true, to a lesser degree, in midtown. What you mostly see downtown and in midtown is residential conversions, or to a lesser extent new construction, which are great, but which aren't renovating existing housing.

If you want to see renovation, you have to see adequate prices in a neighborhood where there are a fair number of salvageable residential buildings. As I mentioned earlier in this thread, prices seem to be high enough in the University District, but while there are some distressed houses, it is a pretty limited supply, and some of them have already been renovated or are in process. It seems like the same thing is happening toward the western end of Boston-Edison, which looks better [[to me, anyway) now than it has in a long time, so I assume people are fixing stuff up.

Oh, yeah. My point was that in Detroit, just like everywhere else in the world, dense housing is worth more than medium or low density at an atomic level.