Michigan Drivers to Receive $400 Auto Insurance Refunds
LANSING – Michigan drivers are set to receive auto insurance refunds of $400 per vehicle, totaling $3 billion, officials announced Tuesday. The refunds come from the Michigan Catastrophic Claims Association (MCCA).
According to a news release, Governor Gretchen Whitmer and the Department of Insurance and Financial Services made the announcement. Checks are expected to be issued to drivers in the second quarter of 2022. Insured motorcycles are also eligible for the full $400 refund.
Whitmer called for the refunds on November 1, citing a surplus in the MCCA Fund, which had grown to $5 billion since the 2019 bipartisan auto insurance legislation was signed into law. This legislation aimed to lower premiums and offer reduced medical coverage options while significantly cutting medical fee schedules for long-term care. The MCCA is a non-profit corporation run by the insurance industry, managing a fund to pay for catastrophic care, and this fund has assets of more than $27 billion.
“These refunds and the recently announced statewide average rate reductions are lowering costs for every Michigan driver,” Whitmer said in the news release. “Michiganders have paid into the catastrophic care fund for decades, and I am pleased that the MCCA developed this plan so quickly after unanimously approving my request to return surplus funds to the pockets of Michiganders.”
Advocates for accident victims have criticized the refund plan, voicing concern that it will deplete funds intended to care for catastrophically injured residents. Republicans have also accused Whitmer of playing politics with the issue, as the refunds are expected to be issued months before the November election where Whitmer is seeking reelection.
An MCCA analysis indicated that $3 billion of the current surplus could be returned to motorists “while ensuring continuity of care for auto accident survivors,” according to the release from Whitmer’s office.
Lt. Gov. Garlin Gilchrist stated that the refunds are a victory for all Michigan motorists, especially those in Detroit, who “have paid the highest insurance rates in the nation for decades.”
MCCA Executive Director Kevin Clinton reported in a Monday letter to the state insurance agency that all insured vehicles as of October 31, 2021, will receive the $400 refund. However, vehicles with “historical vehicle” plates will receive an $80 refund.
Eligible consumers don’t need to take any action to receive the refund. The MCCA will transfer the surplus funds to the insurance companies operating in Michigan by March 9, 2022, and the insurers will distribute checks to eligible policyholders, the news release explained.
The insurance premium surcharges that go to the MCCA are now applied only to motorists who opt for unlimited accident coverage.
Erin McDonough, the executive director of the Insurance Alliance of Michigan, expressed her group’s strong support for the refunds.
Her group is “pleased the MCCA board landed on a refund amount that balances giving insured drivers back the money they deserve while protecting the longevity of a fund that pays for the cost of medical care for Michiganders seriously injured in car accidents,” McDonough said.
The refund is further evidence that the 2019 legislative changes “are working and delivering real savings to drivers across the state,” she stated.
