Michigan Auto Insurance: Refund Expectations Explained

Michigan drivers are receiving $400 refunds from auto insurance companies as part of a bipartisan auto reform bill passed in 2019. The refunds are being given to all Michigan drivers who had a vehicle insured in the state before 11:59 pm on October 31, 2021. The Michigan Catastrophic Claims Association (MCCA) is disbursing $3 billion to auto insurance companies, which will then be passed on to drivers. The refunds are a result of Governor Gretchen Whitmer's call to return surplus funds to Michigan policyholders.

Who is eligible for the refund?

In Michigan, eligible drivers will receive a refund of $400 per vehicle or $80 per historic vehicle. This refund is a result of the state's new bipartisan auto insurance law, which was signed by Governor Gretchen Whitmer in 2019. This law was designed to cut down on what had been the highest insurance rates in the nation, ending mandatory lifetime coverage for auto crash victims and creating new fee limits for medical treatment.

To be eligible for a refund, you must have had a car, motorcycle, or RV that was insured to drive legally on Michigan roads as of 11:59 pm on October 31, 2021. The vehicle must have been covered by a policy that meets the minimum insurance requirements for operating a vehicle on Michigan roads. This includes property damage and bodily injury liability coverage, as well as personal injury protection (PIP).

It's important to note that trailers are not subject to the MCCA assessment and therefore are not eligible for the refund. Additionally, vehicles in storage on October 31, 2021, with only comprehensive coverage do not qualify for the refund.

If you are eligible for a refund, you do not need to take any action to receive it. The refund will be issued to you by your insurance company in the form of a check or ACH deposit. However, you may want to verify your address and banking information with your insurance company to prevent delays in receiving your refund.

If you have not received your refund by the deadline, you should contact your insurance company to ensure it has been issued. If you cannot reach a resolution with your insurance company, or if they offer your refund in a form other than a paper check or direct deposit, you can call the Department of Insurance and Financial Services (DIFS) at 833-ASK-DIFS for assistance.

When will eligible people receive the refund?

Eligible people will receive their auto insurance refund in Michigan by 9 May 2022. This was the deadline imposed by the Department of Insurance and Financial Services (DIFS) for insurers to issue refunds to eligible Michiganders. The Michigan Catastrophic Claims Association (MCCA) transferred $3 billion to Michigan insurers, who were responsible for issuing refunds to eligible drivers.

The refunds are $400 per vehicle or $80 per historic vehicle and must be sent as a paper check or an ACH deposit. Eligible drivers do not need to do anything to receive their refund, but they may wish to verify their address or banking information with their insurance company to prevent delays.

If you are eligible for a refund and do not receive it by the deadline, contact your insurance company. If you have questions or concerns that cannot be resolved directly with your insurer, contact DIFS by calling Monday through Friday 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437) or emailing [email protected]. More information is available at Michigan.gov/MCCArefund.

How will the refund be paid?

The Michigan Catastrophic Claims Association (MCCA) refund will be paid by issuing a cheque or making an ACH deposit to eligible policyholders. The MCCA will transfer the surplus funds to insurance companies operating in Michigan, and these insurers will then be responsible for issuing the refunds to eligible customers. The deadline for the refunds to be issued is May 9, 2022.

The Michigan Department of Insurance and Financial Services (DIFS) has directed insurers to issue refunds as quickly as possible but no later than the deadline of May 9. The MCCA must sell investment securities, collect data, ensure the accuracy of the refund amounts, and securely transfer funds. Insurance companies also need to collect data, develop internal processes, and ensure the refunds are issued accurately and securely.

Eligible drivers do not need to take any action to receive their refund. However, they may wish to verify their address and banking information with their insurance company to prevent delays. If you have moved since October 31, 2021, your insurance company will send your refund to the address or bank account on record, so you should contact them to ensure they have your current information.

If you are eligible for a refund and do not receive it by the deadline, you should contact your insurance company. If you cannot reach a resolution with your insurance company, or if they offer your refund in a form other than a paper check or ACH deposit, you should contact DIFS for assistance.

What vehicles are eligible for the refund?

In 2022, Michigan drivers received a $400 per vehicle auto insurance refund. This refund was part of the 2019 auto insurance reforms, which were designed to reduce what were the highest insurance rates in the nation.

To be eligible for the refund, vehicles must have been insured as of 11:59 pm on October 31, 2021, and covered by a policy that meets the minimum insurance requirements for operating a vehicle on Michigan roads. This includes cars, motorcycles, and RVs. The refund also applies to historic vehicles, which are charged 20% of the annual MCCA assessment due to their limited allowable use. For these vehicles, the refund amount is $80.

Vehicles that were in storage on October 31, 2021, with only comprehensive coverage, are not eligible for the refund. Trailers are also not eligible, as they are not subject to the MCCA assessment.

For commercial fleet policies, the refund amount depends on how the vehicles are identified in the policy. For vehicles that are individually identified, such as by VIN or license plate number, the full $400 refund per vehicle will be given. For policies written on a per-plate basis, the refund will be calculated and sent on a per-plate basis. For commercial fleet policies written on a gross receipts basis or where individual vehicles cannot be identified, the refund will be calculated as 135% of the applicable in-force commercial auto PIP written premium.

Is the refund taxable?

The Michigan Catastrophic Claims Association (MCCA) refunds are generally not taxable for most Michiganders. However, people who deducted their auto insurance premiums as a business expense may be required to include all or a portion of this refund as income on their tax returns. This means that if you are a Michigan resident and have not claimed your auto insurance as a business expense, you do not need to include the refund in your tax returns.

If you are unsure about your specific circumstances, it is recommended that you consult your insurance agent or a tax professional for further advice. For additional information, refer to the Michigan Department of Treasury Administrative Bulletin RAB 2021-23.

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