The next year, Michigan consumers shouldn't anticipate receiving another $400 refund check from their auto insurance provider.
Instead, they can anticipate a new $48 fee to be added to their insurance payment.
The state fund for medical costs for the most severely injured auto accident victims went from having a $5 billion surplus in 2020–2021 to having a $3.7 billion deficit in the fiscal year ending June 30. This is according to the Michigan Catastrophic Claims Association's most recent annual report, which was released this week.
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| Michigan drivers face new $48 fee in 2023, no more $400 checks |
There were three key causes of the deficit:
- This summer, a court judgment (with a loss of $3.7 billion expected) removed several no-fault medical expense limitations for accident plaintiffs.
- recent stock market falls ($2.8 billion loss).
- the $400 per vehicle refund checks that were issued last spring as a result of the prior surplus ($3.1 billion loss).
- Michigan residents shouldn't count on receiving another $400 refund check from their auto insurance company the following year.
They should prepare for a new $48 fee to be added to their insurance payment instead.
From having a $5 billion surplus in 2020–2021 to having a $3.7 billion deficit in the fiscal year ending June 30, the state fund for medical expenses for the most badly injured auto accident victims. This is supported by the most recent annual report, which was made public this week by the Michigan Catastrophic Claims Association.
The new $122 fee for unlimited no-fault coverage is composed of the $48 deficit recoupment and a $74 "pure premium."
According to MCCA Executive Director Kevin Clinton, even while drivers who opt out of PIP or choose a less-than-unlimited insurance are not eligible for the MCCA's benefits under Michigan's no-fault law, they are nonetheless responsible for helping to close the state's budget gaps.
Nearly all insured automobiles paid the entire MCCA assessment until Michigan's no-fault auto insurance system underwent a recent change.
The 2019 legislative amendment provided drivers their first-ever choice in the amount of medical benefits included in auto insurance premiums in an effort to save them money. For the 2019–20 fiscal year, everyone paid the final full MCCA assessment of $220.
The Michigan Department of Insurance and Financial Services issued a statement on Friday saying, "We are pleased to see that the assessment for anticipated new claims continues the downward trend we saw when Michigan's new auto insurance law was passed, but of course are disappointed that there is now a projected deficit for past claims resulting in a per-vehicle assessment for all drivers."
Last spring, motorists in Michigan received $400 refund cheques for the now-gone MCCA surplus.
Democratic governor Gretchen Whitmer, who is running for reelection next month and signed the no-fault reform into law, said earlier this year: "I asked for these refunds because I am committed to cutting expenses for Michiganders and putting money back in people's pockets."
The catastrophic care fund is managed by the MCCA, a nonprofit organisation that is governed by the insurance sector. According to Clinton, the actuarial committee of the MCCA, which consists of nine accredited actuaries, and an independent actuarial consulting firm work together to help the board of directors establish the assessments.
Appeals court:
Previous crash survivors are not covered by Michigan's no-fault revamp
Numerous Michigan drivers opt out of unlimited no-fault insurance, but the rate decline is modest.
The MCCA functions as a type of reinsurance that pays vehicle insurers back when the amount of medical expenditures for an accident victim exceeds a predetermined limit, presently $600,000.
As of June 30, there were 16,800 people in Michigan who had met the eligibility requirement and had open claims, down from 17,542 a year earlier. When a claimant gets better, reaches a settlement, or passes away, the MCCA often closes up the case.
One such person with an open and active MCCA claim is former Red Wings star Vladimir Konstantinov, who suffered brain damage in a 1997 limo crash and needs constant monitoring at his home.
