Michigan Drivers Should Get Refunds, Catastrophic Claims Committee Votes

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Lansing – The Michigan Catastrophic Claims Association board of directors voted Wednesday in favor of issuing refund checks to drivers statewide, but details of the refunds have yet to be defined.

Specific information on the amount of reimbursement per vehicle and the proposed schedule will be announced in the “next few weeks,” according to a statement from the association, which currently has a surplus of $ 5 billion. Under state law, the MCCA levies a membership fee each year to cover claims for catastrophic people injured in car accidents.

The group’s move on Wednesday came following a request from Michigan Governor Gretchen Whitmer and will be a financial boon to motorists two years after lawmakers revised auto insurance policies in the state. Under the law, a refund was supposed to be possible after an audit in 2022.

“The goal is to issue the largest possible refunds to consumers while maintaining sufficient funds to ensure high quality care for those who have been catastrophically injured,” the MCCA press release said.

The vote came two days after Whitmer called on the association to return the $ 5 billion surplus through refund checks to every resident with auto insurance.

“It is great news that the Michigan Catastrophic Claims Association has taken swift action in response to my letter this week to initiate the process of issuing reimbursement checks to reduce costs and save the Michiganders money. to auto insurance, ”Whitmer said Wednesday. “The people of Michigan have contributed to the Catastrophic Care Fund for decades, and those funds from the $ 5 billion surplus are in the pockets of Michigan policyholders.”

Likewise, Anita Fox, director of the State Department of Insurance and Financial Services, urged the MCCA board to act “quickly to determine the amount, process and schedule to issue refunds promptly to all. Michiganders with auto insurance ”.

The association’s surplus fell from $ 2.4 billion at the end of 2020 to $ 5 billion as of June 30. The change is “in part a reflection of the economy measures” included in the state auto insurance reform approved in 2019 by the legislature and signed by Whitmer, the governor said on Monday in a letter to Kevin Clinton, executive director of the MCCA.

Clinton said he doubts the MCCA board of directors is donating all of the organization’s surplus.

Prior to the 2019 changes, Michigan drivers were generally required to have unlimited personal injury protection as part of their auto insurance, with the MCCA assessment paid for by all policy holders. After the changes, the MCCA was responsible for policies issued before July 2, 2020 and new policies in which drivers chose unlimited coverage – Clinton said about 80% of Michigan drivers chose to stick with one. unlimited coverage.

Last November, the Claims Association announced that its valuation billed per vehicle was lowered to $ 86 for the period July 1, 2021 to June 30, 2022, a 61% reduction from the $ 220 fee two years earlier. . The association said the latest reduction was “primarily the result of savings created by controlling the costs of medical treatment and other changes” to the Motor Insurance Act of 2019.

The legislature created the MCCA, but it is not considered a state agency. The MCCA Board of Directors consists of five voting members who represent the insurance industry.

The Insurance Alliance of Michigan strongly supports the MCCA’s efforts to put money back in the pockets of Michigan drivers, said Erin McDonough, executive director of the alliance.

“It is important that the MCCA Board of Directors do their due diligence and land on a reimbursement amount that balances giving back insured drivers the money they deserve while protecting the longevity of a fund. which pays the cost of medical care for Michiganders seriously injured in car crashes, ”McDonough said.

House Speaker Jason Wentworth R-Farwell said he was happy the 2019 reforms produced savings big enough for the MCCA to act immediately and give people money back.

“No-fault reform works, and the savings and benefits for Michigan families are improving all the time,” Wentworth said.

In recent months, there has been strong pressure from accident victims and healthcare providers to amend elements of the 2019 law, including the requirement that from July 1, 2021, reimbursement eligibility for healthcare providers. or capped at 55%. In June, Whitmer urged the legislature to act to “ensure that some of our most vulnerable residents retain access to their care.”

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