LANSING – Though insurance rates in Detroit have long been a target of reform proponents, nearly the entire state faces rates deemed unaffordable under federal standards, a report from the University of Michigan Poverty Solutions said.

The U.S. Department of Treasury Insurance Office says insurance rates of more than 2 percent of median annual income for a region are unaffordable. The U-M study found only 3 percent of the ZIP codes in the state has insurance rates below the 2 percent threshold.

“In Detroit, average rates represent between 12 and 36 percent of residents’ pre-tax income in nearly every ZIP code,” the report said. “By comparison, the Department of Housing and Urban Development considers housing costs to be unaffordable if they surpass 30 percent of income.”

Among the communities that meet the insurance affordability threshold are Birmingham, Bloomfield Hills, DeWitt and Williamston, the report said.

Most of the state, geographically, faces rates between 4.1 percent and 8 percent of income. Urban areas are generally in the 8.1 percent to 12 percent band, though Detroit, Pontiac and Saginaw all top that.

Based on insurance rates compiled by Zebra and U.S. Census data, the report said Cleveland and St. Louis, both with similar median incomes to Detroit, have insurance rates of 4 percent and 3 percent of those incomes, respectively.

Michigan’s high rates mean more people drive without insurance (20 percent statewide and near 60 percent in Detroit compared to 13 percent nationally) or don’t drive.

“Recent findings from a representative survey of Detroiters finds that 34 percent don’t own a car, and nearly a quarter report having recently missed work or an appointment due to lack of transportation,” the report said, adding that transit in the city is inconsistent and often does not reach the suburbs where jobs are.

The recommendations in the report follow reforms that have been at least discussed in the Legislature over the last decade: allow choices other than unlimited medical coverage, impose fee schedules on medical services and remove rate elements not related to driving (such as credit scores).

The report also recommended limiting the time to file a claim. Michigan, at one year from the incident, has among the longer claim periods nationally and the report said that allows some additional room for fraud and personal injury protection-related lawsuits.

This story was published by Gongwer News Service.