Michigan Auto insurance Fee for Catastrophic Injuries Rising to $160

March 24, 2016

The annual auto insurance fee that Michigan drivers pay toward caring for people catastrophically injured in crashes is rising to $160, a $10 increase. The assessment increased by $10.00 because assets set aside to pay existing claims produced returns less than anticipated.

The Michigan Catastrophic Claims Association announced Tuesday the new per-car assessment for the 12 months starting July 1.

All auto insurers operating in the state must pay the fee. The Livonia-based group collects funds to reimburse auto insurers for personal injury protection claims that exceed $545,000 per claim. It paid out $1.1 billion in 2015, mostly for brain and spinal cord injuries, multiple fractures, and back and neck injuries.

Of the $150 being assessed, about $140 will cover anticipated new claims and $19 will address a $1.3 billion estimated deficit for existing claims. One reason for the deficit is that payments to full time family or agency attendant and residential care providers make up approximately 58 percent of claim payments. Another $0.40 will go to administrative expenses.

Since 1979, there have been more than 34,400 claims reported to the MCCA, which will cost an estimated $83 billion.

Michigan is the only state that requires drivers to buy unlimited medical benefits.

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