Michigan drivers will see changes next month in the annual fees they pay toward the state’s catastrophic insurance claims fund, according to a June 2 report from Michigan Public.
The Michigan Catastrophic Claims Association (MCCA) announced that fees for drivers with unlimited personal injury protection (PIP) coverage will decrease from $90 to $82. Conversely, for those who have opted for limited PIP benefits, the fee will increase from $20 to $23.
MCCA Executive Director Kimberly Bezy stated that the adjustments are necessary to address a roughly $2.1 billion deficit in the fund. “We really take a look at how much that is going to be and determine if our current funds are going to be sufficient,” Bezy said. “If there is not sufficient money, then we look at any deficit or any shortfall and we actually amortize that out by no less than 15 years.”
The current rates, despite the changes, remain lower than those recorded between 2003 and 2021, based on data from the MCCA’s historical assessments.
In 2021, Michigan implemented reforms to its auto insurance laws that ended the mandate for all drivers to carry unlimited PIP coverage. That same year, the MCCA issued $400 rebate checks, following guidance from Governor Gretchen Whitmer, using what was described at the time as surplus funds.
Some advocates for crash survivors have criticized both the 2021 policy changes and the rebate disbursements, arguing that they contributed to the current deficit. They also claim that the system has made it harder for people with severe injuries to get necessary care.
Maureen Howell, a member of the advocacy group We Can’t Wait, expressed concern over the association’s structure, stating, “Nobody that is a family member or a provider or anyone that would have the ability to understand the situation from the standpoint of survivors is involved in the makeup of the MCCA.”
In response, the MCCA maintains that it continues to serve injured parties. A press release issued on Monday stated the organization is nearing $25 billion in total payments since its founding in 1978. Bezy added that since the 2021 reforms, survivor payouts have increased in some areas.
Still, at the end of 2023, 15,388 cases remained open, and advocates remain skeptical. Some argue that even unlimited policies don’t ensure unlimited care due to reimbursement rate cuts that have forced many care providers out of the market.
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