What’s Next For Michigan Auto Insurance Reimbursements

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Lansing – Details on how much money individual Michigan drivers will receive from the catastrophic claims association’s potential billion-dollar reimbursement will likely be weeks away, state insurance director Anita said on Friday. Fox.

Then the process of sending money to auto insurance companies and businesses issuing checks to policyholders could take until next year, said Fox, director of the State Department of Insurance and Services. financial.

“I hope they move as quickly as possible,” Fox said in an interview.

His comments on Friday closed a week that began with Gov. Gretchen Whitmer calling on the Michigan Catastrophic Claims Association to return a $ 5 billion surplus through reimbursement checks to every resident with auto insurance.

The demand shed new light on the nonprofit, run by insurance companies, which takes an appraisal each year to cover claims for catastrophic people injured in car crashes in Michigan.

On Wednesday, the MCCA board of directors voted in favor of issuing reimbursement checks to drivers statewide, but did not announce details of the rebate amount. Specific information on the reimbursement amount per vehicle and the proposed schedule will be announced in the “coming weeks,” the MCCA said in a statement Wednesday.

The MCCA is not considered a state agency. But the Department of Insurance and Financial Services has a non-voting position on the association’s board of directors.

Fox, who heads the agency that regulates the insurance industry, said she could raise issues if it appeared the upcoming reimbursement was “unreasonably small.” She wants to make sure drivers get the maximum reimbursement while protecting the fund’s viability from catastrophic losses, she said.

“It’s a very reasonable request considering the size of the surplus, the rate at which it has grown and even just in the context of the last year the Michiganders have had,” Fox said of the request for Whitmer refund. “There are a lot of families who have had financial difficulties.

MCCA executive director Kevin Clinton said in an interview Monday that he doubted the board would hand over all of the organization’s $ 5 billion or more surplus.

Under current state law, a refund through the MCCA was supposed to be possible after an audit in 2022. The large surplus has helped increase this financial windfall for drivers.

“The goal is to make the largest possible reimbursements to consumers while maintaining sufficient funds to ensure high quality care for those who have been catastrophically injured,” the MCCA said in a statement on Wednesday.

Fox said she did not have an estimate on Friday of how much each Michigan driver could receive. It is not known what actuaries will determine, she said.

The manager said she expects all policyholders, not just those who have chosen unlimited personal injury protection, to receive reimbursements as the excess has accumulated over time.

Fox said she understood the MCCA had agreed in concept that refunds would be issued and the money would flow to insurance companies and then policyholders. Fox said she expects the MCCA to announce “nuts and bolts” information about refunds “shortly,” including how much money drivers will receive and when the money will be released.

The association will also have to reveal the “registration date,” Fox said, which means all policyholders on that date will receive refunds.

“There will be a public announcement,” Fox said. “From there, I will take what the MCCA has determined and determine if I need to perform an additional review or take additional action.”

Before an overhaul of Michigan auto insurance laws in 2019, state drivers were generally required to have unlimited personal injury protection as part of their auto insurance, with the MCCA assessment paid for by everyone. policy holders. After the changes, the MCCA was responsible for policies issued before July 2020 and new policies in which drivers chose unlimited coverage. Clinton, director of the MCCA, said about 80% of Michigan drivers have chosen to stick with unlimited coverage.

The MCCA can only bill insurers for policies that continue to offer unlimited coverage.

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

Some advocates fear that the reimbursement request will complicate efforts to change the fee schedule at a pivotal time. Fox said she sees the two issues as separate.

“I don’t think the legislature can say they got a refund on some premiums, so we don’t have to worry about access to care,” Fox said.

The Insurance Department has set up a hotline for those with questions or concerns about auto insurance in Michigan: 833-ASK-DIFS.

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