Why Michigan’s Auto Insurance Fees Are Increasing


MCCA Insurance

We were all thrilled to receive a $400 refund check per insured vehicle last summer, however Michigan’s Catastrophic Claims Association (MCCA), will soon be taking some of that back in increased insurance fees starting in July of 2023.

Backstory; our refunds came from the MCCA fund; which is a private, nonprofit association that pays for lifetime medical claims of Michiganders catastrophically injured in a car accident. Everyone paying for auto insurance in Michigan is paying into this fund when you pay your premium. It’s included in your auto insurance bill and then your carrier forwards the MCCA fees to the fund.

Because it’s a nonprofit, in November 2021, Michigan’s Governor called for the MCCA to refund much of its’ 5.04 billion surplus. On the other side of the argument were families of injured victims, who wanted the surplus left alone to continue taking care of their catastrophically injured loved ones. 

But, as happens when a Governor is vocal on a topic followed by press, the MCCA agreed and issued $3.1 billion in refunds in the form of those $400 per insured vehicle checks.  

So why are rates going up? Because the surplus has been wiped out. In fact, the MCCA fund reported a $3.7 billion deficit in June of 2022. 

What? Wait! How could there possibly be a loss of $8 billion in one year? 

The report points to 3 factors; a court decision in summer of 2022 that overturned no-fault medical cost controls (setting maximums) for crash victims which has a projected loss of $3.7 billion, a stock market loss of $2.8 billion, along with the $3.1 billion refunded to all of us.