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 Marsha Chartrand

Michigan drivers to get car insurance refund from $5B surplus

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The Michigan Catastrophic Claims Association said Wednesday it would be moving to issue refunds to state drivers based on 2019 auto insurance reforms.

By Sergio Mart铆nez-Beltr谩n (Bridge Michigan)

The Michigan Catastrophic Claims Association voted Wednesday to use part of its $5 billion surplus to refund the state insured drivers.

The association issued a statement that did not immediately reveal how much refunds will be, or give a timeline on when consumers can expect their checks.

鈥淭he 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,鈥 the MCCA board said.

The refunds come as a result of Michigan 2019 auto insurance law, which was passed to lower auto insurance rates by creating a fee schedule to cap benefits and end mandatory lifetime coverages for car crash victims. The law included聽a refund mechanism聽to return a portion of surplus funds to motorists.

Under the law, $80-per-driver refunds were set to be issued in 2022 after an independent audit. But聽Bridge Michigan calculations estimate the refunds could be significantly higher 鈥 ranging from $80 a driver to $700.

MCCA vote comes two days after Gov. Gretchen Whitmer, a Democrat, called on the industry-led nonprofit to 鈥渋mmediately鈥 use some of its $5 billion surplus to issue refunds to every Michigander with auto insurance.

On Monday, MCCA leadership was apprehensive about the idea of issuing larger refunds. Director Kevin Clinton told Bridge then that the surplus could come in handy if the agency had 鈥渁 bad judicial decision that makes us pay more.鈥

But on Wednesday the MCCA board decided to support Whitmer call.

鈥淲hile Michigan consumers still have access to the most generous medical benefits through their auto insurance in the nation, there is no doubt that reforms enacted by the Legislature and signed by the governor are working to provide relief to consumers and reduce the cost of auto insurance,鈥 the MCCA statement said.

鈥淢ichigan consumers will continue to be the primary beneficiaries of these important reforms, as they should be.鈥

Following the commission statement, Whitmer issued one of her own, saying the decision will lower the cost of insurance in the state.

鈥淢ichiganders have paid into the catastrophic care fund for decades, and these funds from the $5 billion surplus belong in the pockets of Michigan policyholders,鈥 Whitmer said.

House Speaker Jason Wentworth, R-Farwell, said in a statement this is an example of how no-fault insurance reform is working. The package was introduced and pushed by Republicans in the legislature and signed by Whitmer.

鈥淚鈥檓 glad our reforms have produced large enough savings for the MCCA to act immediately and return that money to the people even sooner,鈥 Wentworth said.

But the insurance reform law has had its fair share of critics.

Many have said taking money out of the catastrophic claim funds would be a 鈥渟lap in the face to the survivors and families who have been begging for relief鈥澛爁rom what they say it a 鈥渃are crisis鈥 brought about by the creation of the 2019 law.

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