Insurance Refund: Michigan Drivers Getting $400 Per Vehicle Next Spring

Matt Posky
by Matt Posky

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 to 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]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Conslaw Conslaw on Dec 08, 2021

    Nothing is preventing Tesla from agreeing to unionize to take part in that sweet $4500/vehicle subsidy. Note there is a domestic manufacturer subsidy separate from the union subsidy.

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    • Mcs Mcs on Dec 08, 2021

      "Nothing is preventing Tesla from agreeing to unionize to take part in that sweet $4500/vehicle subsidy. " Actually. there is. It's not Telsa's choice. It's something that's decided by the employees. Check the NLRA.

  • The Snu The Snu on Dec 08, 2021

    Counter Point for a Plaintiff's attorney in Michigan. The most expensive part of your auto insurance has always been the cost to repair your car. That's usually 50% of the policy charge. We had unlimited no fault benefits. That meant, for example, if you were rendered a quad in an auto accident, you'd get lifetime medical benefits. If you needed surgery, for example, because after years of conservative treatment, you weren't getting better, or it wasn't working any more, you could get that treatment. Your average person, if they get hurt bad enough to have a life-changing injury, it will be in a car accident. And for what little you paid, you got the best. Full stop. Now, here's what's going to happen. People are going to buy the cheapest option, which has minimal coverage for medical bills. IIRC it is $50,000.00. No health insurance covers auto claims. So your auto insurance runs out, because 1 day in the hospital will burn through 50k in a heartbeat. Your health insurance won't pay. So you turn to Medicaid. I'm pretty sure you don't want Medicaid level of care. And suing the negligent driver? Bankruptcy is always an option (other than drunk driving). And what if the accident is your fault? Insurance is the real scam. You can't drive a car in Michigan without insurance. So here's a product that you have no choice but to buy. And everyone thinks that they are insured, they are covered, etc. It's like the guy who sold raffle tickets for a dead horse. He brags to his friend that he made $9,990.00 from selling tickets for the horse. His friend says "who would buy a raffle ticket for a dead horse?" The guy says "I didn't tell them the horse was dead." His friend says "Didn't the winner complain?" The guy says "Yes, so I gave him his $10.00 back." Everyone who has insurance is now buying a raffle ticket for a dead horse. Except they aren't getting their premiums back.

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    • Thegamper Thegamper on Dec 09, 2021

      This is always the battle between plaintiff and defense attorneys. I will fully admit that there are some very serious injuries that fully deserve money thrown at them and that there are some horrible insurance companies and players on the defense side. But I also know that 90% plus of the Wayne County "trial" docket is PIP related, I suspect that the bulk of all Wayne County filings are related to "alleged" auto accidents. Judge Colombo threw that statistic out there a few years back when he was still on the bench. I have seen medical bills for matters with Auto insurance as the primary payer and know that medical providers jack up their rates to astronomical levels for auto cases. The unassigned claims provision in Michigan law have created an almost criminal enterprise. I know that plaintiff firms have started their very own MRI/CT mills and have cultivated their very own crop of experts to testify to anything. I know the defense side of it does the same thing, but in my experience they don't have to nearly as often or to the same extent, because objective treating physicians more often than not will contradict the plaintiff "experts" for us. Some plaintiff attorneys have been/are being investigated for illegal kickback schemes from the medical community. There is an ad for personal injury attorneys on every network in Detroit to the tune of 10-20 per hour on each network. Ads and billboards are strategically placed in low income areas to bring out the "clients". Now, I am truly a bleeding heart and fully appreciate low income access to justice, compensation for the little guys who are injured and are facing the resources of the insurance companies. But Snu, I think you know this....that the whole personal injury thing related to auto has devolved from justice into primarily a bottomless cookie jar for scammers, attorneys and medical providers. I will fully admit that includes the defense side since they make their living on this as well and are fully interested in seeing it continue. My bleeding heart tells me that it is doing far more damage to society than good. Every person in this state is paying the price for this failed system. As you know, there are A LOT of people who cannot afford car insurance. The premiums we spend could put a lot of food on people's tables, instead, the system is reaching into their pocket to redistribute their limited resources to attorneys, doctors and scammers that don't deserve a single penny. Michigan's system is excellent in that it provides for those who have suffered catastrophic injuries. They problem is that everyone else is screwed in the process.

  • Bd2 Tesla is the most important company in the world, responsible for mass enlightenment and empowerment of the educated affluent masses. This lawsuit will only impede the progress of the human race.
  • Aja8888 Good! Hope the owners' win the case, but it will probably be a long time before Tesla releases repair particulars to 3rd party shops. There is a Tesla service center near me I see every day that is absolutely loaded with service-waiting vehicles (parked for weeks) and I'm sure those owners are not thrilled.
  • SCE to AUX I've seen several Fisker Oceans, but not a single 400 Z.
  • Luke42 With Elon Musk just randomly firing the Supercharger team, Tesla has demonstrated that it isn’t a reliable business partner over the long-term.Being able to get 3rd-party repairs just got a lot more important. I’ve also been upping my Tesla-DIY game.That said, I just put 5000 miles on my Model Y in a month (family-obligations) using the Supercharger Network, and my EV is an incredibly capable vehicle when viewed through an engineering lens. As a car guy, driving my EV through the Appalachian mountains where I learned to drive was truly an experience of holding a tiger by the tail and guiding it where I want to go. But, when looking at my Tesla with Elon in charge of sales & service, I do have some serious concerns about the long-term stability of Tesla as a business.My current plan is to trade my Model Y and my GMC Sierra in on a Silverado EV or GMC Sierra EV once the price/availability/finance picture looks favorable. Elon’s unhinged behavior and the Toyota/Honda’s refusal to innovate are making GM look like a good long-term bet to me.I’ll put up with all of this in order to continue driving an EV, though. Even the best gasoline and diesel vehicles are buzzy buckets of bolts compared to me EV, so I’m not going back to a 20th century vehicle.
  • FreedMike Well, this ended up pretty much as I figured it would. I wouldn't think anyone's panties could get in a bunch about a holiday celebrating the end of slavery, but apparently I was wrong.