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Michigan drivers will get refunds on auto insurance fees, board announces

The board tasked with setting and managing private harm safety charges paid by Michigan drivers is supporting Gov. Gretchen Whitmer’s latest request to subject refunds.

In a Wednesday night assertion, the Michigan Catastrophic Claims Affiliation — a statutorily-established nonprofit that each one auto insurers pay into for private harm safety underneath the state’s auto no-fault system — introduced its board unanimously voted to assist issuing refund checks to Michigan drivers.

The MCCA didn’t provide any particular quantities or a timeline for the refunds, however the assertion famous particulars can be introduced within the coming weeks. The board’s aim “is to subject the biggest potential refunds to shoppers whereas sustaining adequate funds to make sure high-quality care to those that have been catastrophically injured,” the assertion reads.

Associated: Why Whitmer is asking auto insurance industry to give ‘maximum amount’ of $5B surplus back to drivers

The announcement comes on the heels of Whitmer’s latest request that the MCCA use a $5 billion surplus to pay again drivers who’ve paid into the fund. A spokesperson for Whitmer later mentioned the governor was calling for the MCCA to return “the utmost quantity potential” whereas additionally sustaining the viability of the fund, but when $5 billion in refunds have been issued to drivers, it might equate to roughly $676 per car.

In an announcement following the announcement, Whitmer mentioned it was “nice information” that the MCCA is taking swift motion and beginning the method to drive down prices of auto insurance coverage.

“Michiganders have paid into the catastrophic care fund for many years, and these funds from the $5 billion surplus belong within the pockets of Michigan policyholders,” she mentioned.

Division of Insurance coverage and Monetary Providers Director Anita Fox concurred, including she hopes the board will promptly decide the per-vehicle refund quantity and a timetable for getting refunds to drivers.

The charges collected by the MCCA are constructed into premiums Michigan motorists pay. Underneath Michigan’s previous auto insurance coverage regulation, every driver needed to buy limitless private harm safety medical protection and pay the MCCA evaluation, which reimburses insurers for catastrophic medical claims.

Since 2020, Michigan drivers can nonetheless select limitless PIP protection, however now even have the choice to decide on a decrease stage of protection. Solely drivers who select limitless PIP medical protection pay the MCCA evaluation, so long as the fund doesn’t have a deficit.

The latest MCCA fee was $86 per vehicle, down from $220 in 2019 earlier than sweeping modifications to the state’s auto no-fault insurance policies have been signed into regulation.

The prospect of pending refunds for Michigan drivers “is your complete purpose we fastened the state’s damaged auto insurance coverage system in 2019,” Home Speaker Jason Wentworth, R-Farwell, mentioned in an announcement, including he appreciated the governor’s assist.

“We wrote this regulation to incorporate an automated refund subsequent 12 months, and I’m glad our reforms have produced massive sufficient financial savings for the MCCA to behave instantly and return that cash to the individuals even sooner,” he continued.

Insurance coverage Alliance of Michigan Government Director Erin McDonough in an announcement careworn the significance of the MCCA touchdown on a refund quantity that protects the longevity of the fund whereas getting a reimbursement to Michigan drivers.

“The actual fact the MCCA board is even contemplating this reveals reforms handed with bipartisan assist by the Legislature and signed into regulation by Gov. Gretchen Whitmer are working and delivering actual financial savings to drivers throughout the state,” she mentioned.

The governor’s effort comes as auto accident survivors and well being care suppliers petition for modifications to how a lot they’re reimbursed when treating auto-related accidents underneath the 2019 regulation. A portion of the coverage went into impact earlier this 12 months.

Associated: Crash victims, health providers cry foul over impending change to auto injury medical fees

CPAN, a coalition of teams representing crash victims, their medical suppliers and different auto insurance coverage policyholders, spoke out in opposition to Whitmer’s request earlier this week. President Devin Hutchings known as it “a slap within the face to the survivors and households who’ve been begging for aid” from a change within the regulation that led to a forty five% reduce to reimbursement from insurance coverage corporations for well being care companies offered to auto accident survivors not lined by Medicare.

“The Governor’s announcement appears designed to distract our consideration away from the actual subject — the truth that survivors of catastrophic auto accidents are struggling underneath the brand new regulation, and that auto insurance coverage corporations are persevering with to gouge shoppers,” Hutchings mentioned.

The regulation was accepted in 2019 in an effort to decrease Michigan’s auto insurance coverage charges, which continuously have been ranked the best within the nation. Though common automobile insurance coverage charges have declined considerably for the reason that first section of Michigan’s auto insurance coverage regulation went into impact, analysts say it’s still one of the most expensive places in the country to insure a car.

Associated protection:

Michigan average car insurance rates drop significantly, but still among highest in U.S.

Michigan’s new auto insurance law brings excitement, concern

What to consider when buying auto insurance in Michigan

Will Michigan drivers change their policies once new auto insurance law takes effect? Many still don’t know

Why it’s hard to predict individual savings under new auto insurance law

Michigan auto insurers see ‘coronavirus windfall’ as driving, crashes decrease

Roughly half of insured Michigan drivers wouldn’t choose to opt out of no-fault coverage, survey finds

Gov. Whitmer signs bill overhauling Michigan auto insurance

Michigan orders auto insurance refunds due to ‘extreme reductions in driving’

Michiganders to see another drop in auto insurance fee in 2021

 

 

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