Despite being one of the last hero states to not require routine vehicle inspections, Michigan is infamous for boasting the highest auto insurance rates in the whole country. Blame the double-edged sword that is the state’s no-fault insurance scheme, the region’s relatively high number of uninsured motorists, or the general popularity of personal injury lawsuits (an American pastime). Heck, blame the whole insurance industry while you’re at it because it’s the one that managed to become wildly profitable off the concept that you’ll be bankrupted if you don’t pay in.
But don’t blame Michigan’s formerly mandatory unlimited personal injury protection (PIP) requirement that’s been around for decades, because it was done away with in 2019. The previous arrangement required drivers in The Mitten State to purchase unlimited PIP insurance, allotting for those at fault (no-fault insurance schemes be damned) to provide a lifetime of medical benefits to victims. On Tuesday, Gov. Gretchen Whitmer’s administration announced that the Michigan Catastrophic Claims Association (MCCA) fund will also be issuing $400 checks to drivers in the spring of 2022 as part of a $5 billion surplus that’s being handed off insurers.
According to The Detroit News, the MCCA board voted in favor of issuing refund checks to drivers across the state on November 3rd. A plan has since been submitted to issue refunds with aid from the Department of Insurance and Financial Services. Anyone with a Michigan-based insurance policy from October 31st will be deemed eligible, with automatic payouts coming via their chosen insurance firm next year. Michiganders will be receiving $400 per car unless it’s wearing historic plates (which is worth $80).
From The Detroit News:
The Democratic governor called on the MCCA to issue refund checks to distribute its $5 billion surplus in November. Democratic and Republican lawmakers have supported the refund effort. Under state law, the MCCA levies an assessment each year to cover claims for those catastrophically injured in car accidents.
The organization’s analysis found that about $3 billion of the surplus could be returned to policyholders. The MCCA sought “to issue the largest possible refund to policyholders while maintaining sufficient funds to ensure continuity of care,” said a letter from Kevin Clinton, the association’s executive director.
Whitmer said Tuesday that “these refunds and the recently announced statewide average rate reductions are lowering costs for every Michigan driver.”
“Michiganders have paid into the catastrophic care fund for decades, and I am pleased that the MCCA developed this plan so quickly after unanimously approving my request to return surplus funds to the pockets of Michiganders,” the governor said.
There are downsides, however. Insurance agencies (which backed the plan) are still benefiting immensely from the refund and the state’s updated insurance rules have seriously reduced the reimbursement rates insurers are required to pay for health services that lack a Medicaid code. This pertains largely to homecare, with providers now eligible for just 55 percent of their previous rates.
“This kind of energy and focus is misguided when we have people who are losing care,” said Tom Judd, president of the Michigan Brain Injury Provider Council. “When we have people who are struggling to provide care and we have families who are in turmoil. For those people who are going through that process, it looks as if the concern and priority of the governor and the Legislature are not with them.”
[Image: Hanson L/Shutterstock]
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