LANSING — A nonprofit corporation controlled by the insurance industry voted Wednesday to issue refunds to Michigan motorists, just two days after Gov. Gretchen Whitmer called for such action.
But the Michigan Catastrophic Claims Association did not say how big the refunds would be or exactly when they would be issued.
“Today, the MCCA unanimously voted to support issuing refund checks to Michigan consumers,” the board said in a news release. “Details on the specific refund amount per vehicle, along with a proposed timeline and logistics, will be announced in the next several weeks.
“The goal is to issue the largest possible refunds to consumers while maintaining sufficient funds to ensure high-quality care to those who have been catastrophically injured.”
Based on comments Monday by Kevin Clinton, the MCCA’s executive director, the refunds are likely to average at least $100 per vehicle. If the board opted to refund its entire surplus, payments would exceed $600 per vehicle, on average.
House Speaker Jason Wentworth, R-Farwell, was among those who welcomed the announcement, saying: “Delivering real savings like this to Michigan drivers is the entire reason we fixed the state’s broken auto insurance system in 2019.”
But advocates for catastrophically injured auto accident victims are concerned both by Whitmer’s call for the refund payments and the board’s quick agreement. They fear that reducing the MCCA’s fund surplus, which is currently sitting at $5 billion, will make it more difficult to restore benefits to accident victims requiring long-term care to something closer to what they were before the 2019 bipartisan legislation was passed.
Whitmer said Wednesday it is “great news” that the board has acted so quickly in response to a letter she sent the MCCA Monday.
‘Michiganders have paid into the catastrophic care fund for decades, and these funds from the $5 billion surplus belong in the pockets of Michigan policyholders,” Whitmer said.
State law requires the MCCA in September 2022 to refund to Michigan motorists any surplus it holds in excess of 120% of its estimated liabilities. Clinton said Monday that if the refunds were issued today, instead of next year, the refundable surplus would be $743 million, or about $100 per vehicle.
The 2019 law, intended to lower Michigan’s highest-in-the-nation auto insurance premiums, scrapped mandatory unlimited catastrophic medical coverage and gave motorists five choices for their insurance, ranging from keeping the current system of unlimited lifetime benefits to opting out entirely from the personal injury protection portion of insurance coverage.
Even for those who opt for unlimited coverage, the medical fee schedule is sharply reduced, even for those who suffered catastrophic accidents before the new law took effect.