Get Caught Up: Michigan drivers to get insurance refunds -- what to know

Michigan Catastrophic Claims Association votes to support governor’s request for auto insurance refunds

Refunds are coming. That’s the word from the board governing the Michigan Catastrophic Claims fund.

Insured Michigan drivers will be receiving auto insurance refunds after Gov. Gretchen Whitmer called on the Michigan Catastrophic Claims Association to redistribute funds from its $5 billion surplus back to the people.

Earlier this week, Whitmer sent a letter to the MCCA, calling on the nonprofit to refund insured drivers as soon as possible, after the group reported a $5 billion surplus in June. Members of the association on Wednesday unanimously voted to support Whitmer’s request.


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In Whitmer’s letter sent Monday to the MCCA, the governor said the association reported a $2.4 billion surplus at the end of 2020, and now the surplus is up to $5 billion. She is calling on the association to deliver refund checks to all Michigan residents with auto insurance.

“The over $5 billion surplus accumulated by the MCCA belongs to Michiganders and should be put in people’s pockets immediately with a refund check,” said Whitmer. “As we stay laser-focused on growing our economy and ushering in a new era of prosperity we need to use every resource we have to help people thrive. A refund check to working families will help us continue to put Michiganders first and drive down costs.”

Every insured driver in the state would be eligible for the refund.

What is the MCCA?

The MCCA is a private nonprofit association established by the Michigan Legislature in 1978. Its purpose, until auto insurance reform was enacted in 2020, is to reimburse no-fault insurance companies for Personal Injury Protection (PIP) medical claims surpassing $600,000. Michigan used to require motorists to pay a unique, annual per-vehicle fee for unlimited health coverage until passage of the law.

Michigan law no longer requires owners and registrants to buy unlimited lifetime coverage for medical expenses resulting from motor vehicle accidents.

The MCCA assesses all auto insurance companies operating in Michigan to cover catastrophic medical claims that occur in the state due to motor vehicle accidents. Insurance companies generally pass those assessments on to their auto insurance policyholders, currently costing them $86 per vehicle.

Refunds: How much and when

Though policyholders are paying $86 per vehicle, refunds from the MCCA could be larger than that amount.

However, it is unclear how much each policyholder would receive.

“Details on the specific refund amount per vehicle, along with a proposed timeline and logistics, will be announced in the next several weeks,” MCCA said in a statement Wednesday. “The goal is to issue the largest possible refunds to consumers while maintaining sufficient funds to ensure high-quality care to those who have been catastrophically injured.”

Under law, the MCCA must be audited starting next year and every third year by an independent actuary appointed by the state insurance director. If the upcoming review, which is due in September, shows that the MCCA’s assets exceed 130% of its liabilities, the difference has to be refunded.

“If we did the formula in the statute and applied it to today’s numbers, it would mean about $100 per car,” said MCCA Executive Director Kevin Clinton.

Whitmer’s proposal sought a refund of $675 per car.

More: Auto insurance refunds in Michigan? How much you’d get under Whitmer request

While the association supports refunding money to Michigan policyholders, members believe that Whitmer is requesting too much money and at too fast a pace.

“It’s important for the MCCA board to do its due diligence and land 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,” said Insurance Alliance of Michigan Executive Director Erin McDonough.

Read Whitmer’s full letter to the MCCA below.


About the Authors:

Ken Haddad is the digital special projects manager for WDIV / ClickOnDetroit.com. He also authors the Morning Report Newsletter and various other newsletters. He's been with WDIV since 2013.