COMMUNITY

JEWFRO

An Open Letter To Legendary
Investor Warren Buffett

D

ear Legendary Investor

Warren Buffett:

3.

May the odds be ever in your
favor. Your underwriting of the
Quicken Loans Billion Dollar Bracket
Challenge made for some momen-
tary March Madness mayhem, even
if the odds of winning were one in
9.2 quintillion — or, if you know
how to pick ponies, as good as one
in 128 billion.
Step off the court with me for
one shining moment. Now that you
and Dan Gilbert are BFFs — and you
declared at Ford Field, "I have a real
love for the city. And the potential is
huge — I'd like to talk to you about
something less momentous, yet even
more maddening than basketball
bracketology.
As encouraging as your
words are (and as deli-
cious as your Dairy Queen
Blizzards are), what Detroit
really needs is for you to
lend us your actuaries.
We know that you are a
math whiz, and I can only
assume that the number
crunchers at your com-
pany Geico are at least as
clever as the cavemen,
reptile and other charac-
ters that pitch your product.
Yes, car insurance. Even those of
us who are bullish about the future
of transit in Detroit agree that most
people need a car to get most places
here. The state, reasonably, mandates
that drivers insure their vehicles, but
insurance costs are far from reason-
able — even for drivers who spend
15 minutes to save 15 percent or
more with you.
Just ask Mike Duggan. When he
moved a few miles from Livonia into
Detroit's Palmer Woods, his auto
insurance bill jumped from $3,000 to
$6,000. Said Mayor Mike:"It is not jus-
tified. It doesn't matter if you have a
perfect driving record and have never
been in an accident. Most Detroiters
are paying more a month for car
insurance than the car payment itself."
The cost is so high that it makes
lots of folks outlaws: Nearly 60
percent of the cars in the city go
uninsured. Even the intrepid young
professionals who are bringing their
zeal, talent and creativity to Detroit
often opt to keep their official resi-
dency outside the city to keep their
insurance premiums low. Among
other things, this prevents them
from voting — in a city that already

www.redthreadmagazine.com

Warren Buffet

Dan Gilbert

struggles with perennially low voter
turnout.
Here's where you come in, Mr. Buf-
fett. The insurance industry's lobby-
ists tell the mayor and the public that
claims in Detroit are higher — most
recently in a letter to the Michigan
Chronicle, our leading African Ameri-
can newspaper. That's
unsurprising. Everybody
expects insurance to cost
more in the city than in
some cornfield where
there are no collisions or
thefts. But you'll search the
papers in vain for any intel-
ligent discussion about the
real question: How much
higher?
We need your actuar-
ies to figure it out. Right
now the city has to spend
its money fixing the streetlights
and can't afford high-priced math
geniuses of its own. The mayor wants
to start a city-owned insurance com-
pany. Can he really make it fly, with
prices below the current market, or
is the cost of accidents in Detroit just
too high?
Lots of folks here think that Detroit
is getting a raw deal. Michigan has
laws prohibiting "unfair discrimina-
tion" in insurance rates — unfair if
they are "not reasonably justified by
differences in losses, expenses or
both, or by differences in uncertainty
of loss"— but the Insurance Com-
missioner, our state official charged
with enforcing those laws, has not
been heard from in any of the news-
paper debates.
It compounds the mood of suspi-
cion that Michigan used to have laws
limiting rate differences between city
and suburbs; under Gov. John Engler
and the anti-regulatory fever of the
1990s, those laws got gutted.
Help us dispel some ignorance.
We're a good bet.

Sincerely,

Ben

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RED THREAD I April 2014 29

