Michigan auto insurance drivers to see a 21% increase in the mandatory MCCA fee

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Increasing medical costs continue to drive up the cost of Michigan auto insurance for every automobile in Michigan

If you have not heard yet, effective July 1, 2012 your Michigan auto insurance will increase by $30.00 per vehicle per year.  The Michigan Catastrophic Claims Association (MCCA) charge is being increased from $145 to $175 per car.  This confirms what insurers and others have been telling public policymakers for years – without real cost controls the price of Michigan’s unlimited no-fault insurance benefits will continue to rise.

In the past 13 years, the mandated cost for providing unlimited health care benefits for drivers through the MCCA has increased from $5 per car to $175 per car

The Michigan Catastrophic Claims Association (MCCA), a private non-profit unincorporated association, was created by the state Legislature in 1978.  Michigan’s unique auto insurance no-fault law provides unlimited lifetime coverage for medical expenses which result from auto accidents.  The MCCA reimburses no-fault  auto insurance companies for each Personal Injury Protection (PIP) medical claim paid in excess of a set amount. Currently that amount is $500,000. That means that the insurance company pays the entire claim, but is reimbursed by the MCCA for medical costs over $500,000.

All auto insurance companies operating in Michigan are assessed to cover the catastrophic medical claims occurring in Michigan.  Those assessments are passed on to auto insurance policyholders.

Facts about Michigan No-Fault Auto Insurance (provided by the Michigan Insurance Coalition):

  • Michigan is the only state in the nation mandating unlimited medical benefits as part of their auto insurance coverage. The next highest state (New York) has a mandatory requirement of $50,000.
  • Hospitals and the medical community routinely charge 300 to 400 percent more for auto insurance patients then they charge for work-related injuries for the exact same procedures.
  • The average cost for a no-fault auto claim in Michigan is $36,788, more than twice as much as the next closest state, New Jersey at $17,025.
  • According to the Office of Financial and Insurance Regulation (OFIR), nineteen percent (almost 1 in 5) drivers in Michigan are uninsured.
* The Michigan Insurance Coalition is a Lansing-based, state property-casualty trade association. 
Get involved!  Contact your state lawmakers and let them know that you support reforming Michigan’s broken no-fault insurance system. Click here to email your state Representative and Senator expressing your support for reforming Michigan’s no-fault insurance laws.