Skip to Content

Michigan Drivers to See Higher Auto Insurance Fee Starting July 1

vehicle in rearview mirror of another vehicle

We knew it was coming, but the Michigan Catastrophic Claims Association’s (MCCA) decision to increase its annual per-vehicle assessment on all Michigan auto insurance policies is set to take effect July 1, one day after the state’s updated Distracted Driving law is first enforced.

What does this mean for Michigan motorists?

  • Drivers choosing unlimited, lifetime medical coverage under personal injury protection (PIP) will be charged $122. The previous cost was $86.
  • Drivers choosing other PIP options, including the “zero-dollar” PIP, will be charged a $48 assessment that essentially helps to recoup the state’s deficit in the MCCA’s statewide fund.

There are a lot of questions that have been posed by Michigan residents for why the MCCA went from a multi-billion budget surplus to a deficit. Reasons include recent court decisions involving catastrophic auto accident claims, a 2022 Stock Market decline, impacting MCCA fund financials, and the cost of the State of Michigan issuing $400 per vehicle refund checks to residents in spring 2022. It is possible that appeals for the catastrophic auto accident claims could help to supplement some of the budget deficit in the months ahead.

According to a June 13 article written by JC Reindl in the Detroit Free Press, the MCCA is a “nonprofit corporation controlled by the insurance industry that manages the catastrophic care fund.” The fund essentially provides reinsurance that “reimburses auto insurers once the size of an accident victim's medical bills exceeds a set threshold,” currently set at $600,000.

Regardless, Michigan’s updated no-fault law passed in 2021 is not saving motorists anywhere near the amount of money on auto insurance that was suggested by the law’s proponents. Make sure you talk with your insurance agent about your auto insurance options so you secure the coverage you need in case of a catastrophic injury. For questions about an auto accident you or someone you know has been involved in, call the auto accident attorney experts at Bashore Green at 248-487-1887.