DETROIT (CBS Detroit) In the face of ever-increasing auto insurance rates, Detroit Mayor Mike Duggan rolled out an alternative insurance plan for Detroit drivers in front of City Council.

The plan calls for capping catastrophic injury payouts at $250,000, which the mayor says would save residents $1,000 each on car insurance per year.

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In order to happen, the state legislature has to sign off on the controversial personal injury cap, which is vehemently opposed by many Democrats and even Republican Oakland County Executive L. Brooks Patterson. Opponents say it’s not right to cap payouts to people catastrophically injured in car crashes.

At the heart of the issue, Duggan says Detroiters are overpaying largely because of injury payouts and lawsuits.

Contrary to popular belief, only 18 percent of the premiums Detroiters pay goes to pay for theft insurance, while 44 percent goes to personal injury protection, the mayor said.

According to, Detroiters pay, on average, $5,941 per year in auto insurance.

Add to that the fact the median income in Detroit was only $26,325 in 2013, according to U.S. Census data.

And pile on the city’s tax rate, which is among the highest in the country. A family earning $25,000 in Detroit would pay $3,421 in taxes, per USA Today.

“Additionally, few cities had higher property taxes than Detroit, where the effective tax rate was almost 3 percent,” the 2014 report in USA Today added. “Property tax burdens would likely be higher if area homes were more valuable. However, Detroit’s home were among the least valuable in the nation.”

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Why are some of the poorest people in the country paying so much for auto insurance? City lawyer Bruce Hallowell says it’s because Detroiters are targeted by so many lawyers’ ads about receiving payment for car crash injuries that the number of lawsuits in the city is astronomical.

“The lawsuits that are filed in Detroit vs. the number that are filed in Oakland County and Macomb County, it is eight times the number in the city of Detroit,” Hallowell said.

Meanwhile, Duggan says lower cost insurance is a “fundamental civil rights question as to why we are permitting this to occur.”

Helping him make the case was NAACP Detroit chapter President Wendell Anthony, who called lowering insurance rates a critical issue.

“Everybody in here has somebody that is using the wrong address (for lower rates in the suburbs),” Anthony said. “If you live in Detroit, you’ve got a son or daughter, or you, paying too much for auto insurance.”



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