Michigan Drivers to Receive $400 Refund for Each Insured Vehicle
Michigan Governor Gretchen Whitmer announced that every driver in the state will receive a $400 refund for each vehicle they own, thanks to a projected $5 billion surplus held by the Michigan Catastrophic Claims Association (MCCA). The MCCA is a nonprofit organization that reimburses auto insurers for high personal injury medical costs.
The refund plan, approved by Gov. Whitmer’s administration, applies to vehicles covered by an active auto insurance policy as of October 31, 2021. Drivers do not need to take any action to receive their refund, which is expected to be distributed in the second quarter of 2022. The MCCA will send the funds to insurance companies in early March, who must then distribute them to drivers within 60 days.
The surplus is attributed to a new law that allows drivers to choose their level of personal injury protection coverage and sets limits on payments to medical providers. This change has helped reduce Michigan’s previously highest-in-the-nation auto insurance rates. “Michiganders have paid into the catastrophic care fund for decades,” Gov. Whitmer said. “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.”
The new law, passed in 2019, has been credited with making insurance more affordable and creating a more competitive market. However, some critics argue that the cost limits have caused problems for individuals with long-term injuries who are struggling to find care due to providers being forced out of business.
The MCCA was created in 1978 to provide unlimited lifetime coverage for medical expenses resulting from motor vehicle accidents. It reimburses insurers for costs exceeding $600,000 per claim. The organization’s annual per-vehicle assessment has decreased significantly, from $220 in 2019-2020 to $86 for 2021-2022, reflecting the reduced financial burden on drivers.
