LANSING – Michigan drivers will see a reduction in the Michigan Catastrophic Claims Association (MCCA) per-vehicle assessment fee for the third straight year, thanks to strong fiscal management and the ongoing impact of the 2019 bipartisan auto no-fault reforms.

 

The new annual assessment fee, which will take effect July 2025, will be $82 for drivers selecting unlimited coverage. That is down from the current $90 assessment fee and represents a 63% reduction from the fee drivers in Michigan paid prior to the 2019 bipartisan auto no-fault reforms. 

 

“When we look at the data, we can clearly see the positive effects of the reforms, with out-of-control medical costs decreasing for many of the costliest procedures,” said Joseph Erhardt, acting director of the MCCA. “Prior to passage of the reforms in 2019, drivers paid $220 for every vehicle. The fee is now decreasing to $82 for those drivers selecting unlimited Personal Injury Protection and $23 for those selecting other coverage limits.” 

 

The MCCA announced the new fee today after a careful and thorough review of its finances and expected expenditures in the coming year. 

 

The per-vehicle assessment is comprised of two parts: a pure premium and a deficit recoupment charge.  

 

The pure premium represents the amount of money the MCCA needs to collect and invest in the coming fiscal year. The pure premium reimburses insurance companies that are required to cover unlimited lifetime costs of care for people injured in catastrophic accidents anticipated to occur during the coming fiscal year. 

 

Statistics show the pure premium would cost at least $45 more per vehicle if it weren't for the 2019 auto no-fault reforms. With about 8.6 million registered vehicles in Michigan, this saves drivers $387 million statewide. 

 

The deficit recoupment charge is added when the MCCA’s estimated liabilities, discounted to present value, exceed the MCCA’s assets. The estimated liabilities are the amount of money the MCCA estimates it will reimburse insurance companies to pay for the lifetime care of accident victims. To make up the deficit, the MCCA must charge an additional per-vehicle amount. 

 

All Michigan drivers with a registered vehicle pay the MCCA assessment fee, regardless of the coverage level they select; however, the amount of the fee a driver pays is dependent on the driver’s insurance selection. The current and new MCCA per-vehicle assessment fees are listed below. 

 

 

The pure premium is decreasing because of the cost reductions contained in the 2019 reforms and more favorable investment returns. Additionally, under the no-fault law, starting July 1, 2025, insurance companies will retain an additional $40,000 per claim before the MCCA starts to reimburse them. 

 

“Thousands of Michigan families depend on the MCCA’s ability to reinsure their catastrophic injury claims,” said Erhardt. “We are proud to continue working to support a stable, sustainable insurance market and make Michigan’s unique auto no-fault coverage more accessible and more affordable. People are getting the care they need without the rampant overcharging that occurred prior to the 2019 reforms. Five years of experience and data paints a clear picture: The cost controls the Governor and the Legislature enacted are working and they will continue to work in terms of reducing the cost of auto insurance in Michigan.” 

 

The deficit increased slightly because of increased costs of care on pre-reform claims that are exempt from the cost controls contained in the 2019 reforms. 

 

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The Michigan Catastrophic Claims Association is a private, non-profit association that serves as the state’s non-profit re-insurer. The MCCA serves as the insurance company for the state’s insurance companies. Since its creation in 1978, the MCCA has been a model of financial stability and success, allowing insurance companies to pay for the care of those who have been catastrophically injured in car crashes. Thousands of Michigan families depend on the MCCA’s ability to reinsure their catastrophic injury claims.