Understanding Mcca And Its Role In Auto Insurance

The Michigan Catastrophic Claims Association (MCCA) is a non-profit association that covers the car accident-related No-Fault medical expenses of catastrophically injured car crash victims. The MCCA is unique to Michigan, which is the only state with an auto insurance no-fault law that provides unlimited lifetime coverage for medical expenses from auto accidents. The MCCA fund reimburses auto no-fault insurance companies for each Personal Injury Protection (PIP) medical claim paid over a set amount. The MCCA fee is charged to auto insurance companies and passed on to drivers in the form of higher premiums.

Michigan Catastrophic Claims Association (MCCA)

The Michigan Catastrophic Claims Association (MCCA) is a private, nonprofit, and unincorporated association created by the Michigan Legislature in 1978. Michigan is the only state with an auto insurance no-fault law that provides unlimited lifetime coverage for medical expenses from auto accidents. The MCCA fund reimburses auto no-fault insurance companies for each Personal Injury Protection (PIP) medical claim above a set amount. For instance, as of July 1, 2023, the MCCA reimburses Michigan auto insurance companies for all medical costs exceeding $635,000.

The MCCA's sole purpose is to pay for the car accident-related No-Fault medical expenses of catastrophically injured car crash victims who are covered by a policy that provides unlimited No-Fault PIP benefits. Under Michigan law, an accident victim is deemed catastrophically injured and eligible for medical benefits coverage through the MCCA when their crash-related medical expenses exceed a specified "retention" amount. This amount was $580,000 for auto insurance policies issued or renewed between July 1, 2019, and June 30, 2021.

The MCCA raises funds to pay for these No-Fault medical benefits through an annual assessment charged to auto insurance companies authorized to sell policies to Michigan drivers. Ultimately, these costs are passed on to drivers in the form of higher auto insurance premiums. Drivers who select unlimited No-Fault PIP medical benefits coverage are required to pay the full MCCA assessment fee. As of July 1, 2023, this fee is $122 per vehicle. Drivers who choose lower coverage levels may be required to pay a portion of the assessment fee to address any deficits incurred by the MCCA.

The MCCA has faced financial challenges in recent years, with its investments losing more than $5 billion in value and a $3 billion refund to drivers, resulting in a $3.7 billion deficit as of June 30, 2022. This deficit has contributed to an increase in the MCCA fee for drivers with unlimited No-Fault PIP medical benefits coverage.

MCCA fee increase

The Michigan Catastrophic Claims Association (MCCA) fee is an annual fee that all Michigan drivers with no-fault insurance must pay per insured vehicle. This fee is in addition to standard auto insurance premiums and helps cover the costs of providing unlimited lifetime medical benefits for individuals who sustain catastrophic injuries in car accidents. While the MCCA fee typically changes every year, a significant increase took place in 2023, primarily due to higher-than-anticipated claims costs and lower investment returns.

Factors Leading to the MCCA Fee Increase

The MCCA fee increase in 2023 was influenced by several key factors:

• Court Ruling: A significant court decision in the summer of 2022 overturned some no-fault medical cost controls for crash victims. This ruling resulted in a projected loss of $3.7 billion for the MCCA.
• Stock Market Declines: Recent declines in the stock market contributed to a $2.8 billion loss for the MCCA.
• Refund Checks: The cost of issuing $400 per-vehicle refund checks in the previous year, due to an earlier surplus, resulted in a $3.1 billion loss.

Impact on Auto Insurance Premiums

The MCCA fee increase directly affected auto insurance premiums for Michigan drivers. As of July 1, 2023, drivers with unlimited Personal Injury Protection (PIP) coverage were charged $122, up from $86 in 2022. Meanwhile, drivers with other PIP coverage options, including zero-dollar PIP, were charged a $48 assessment for "deficit recoupment."

Strategies for Managing Auto Insurance Costs

While the MCCA fee increase contributed to higher auto insurance premiums, Michigan drivers can consider the following strategies to potentially reduce their overall auto insurance costs:

• Review and Adjust Coverage: Evaluate your current coverage and consider adjusting your PIP selection if cost becomes a concern. While unlimited PIP coverage is recommended, it may become cost-prohibitive for some.
• Contact Your Agent: Discuss the impact of the MCCA fee change on your premium with your insurance agent or company. They can provide personalized guidance based on your specific situation.
• Stay Informed: Keep yourself updated on legal developments that may influence auto insurance rates, such as the outcome of the appeal regarding the Andary decision.
• Explore Discounts: Look into potential discounts you may be eligible for, such as safe driver discounts, good student discounts, multi-vehicle discounts, or discounts for completing defensive driving courses.
• Bundle Policies: Consider bundling your auto insurance policy with other types of insurance, such as home or renters insurance, to take advantage of potential discounts.

MCCA fund reimbursement

The Michigan Catastrophic Claims Association (MCCA) is a non-profit association that pays for the car accident-related No-Fault medical expenses of catastrophically injured car crash victims. The MCCA's mission is to ensure that those who are injured in car accidents receive the medical care they need, regardless of the cost. Under Michigan law, an accident victim is deemed catastrophically injured when their crash-related medical expenses exceed $580,000 under an auto insurance policy issued or renewed between July 1, 2019, and June 30, 2021.

The MCCA raises funds through an annual, per-vehicle fee charged to auto insurance companies authorised to sell policies to Michigan drivers. These costs are then passed on to drivers in the form of higher auto insurance premiums. In recent years, the MCCA has faced a deficit due to several factors, including a court decision overturning no-fault medical cost controls for crash victims, declines in the stock market, and the cost of refund checks issued to drivers due to a surplus in 2022.

To address the deficit, the MCCA has implemented a new $48 fee for all Michigan drivers, which will be included in insurance bills for policies starting July 1, 2023. This fee applies to all drivers, even those who opt out of Personal Injury Protection (PIP) or choose a limited policy. The previous surplus in 2022 resulted in $400 refund checks for Michigan drivers. These refunds were issued to all eligible vehicles insured as of October 31, 2021, and were distributed by insurance companies in the form of checks or ACH deposits.

The MCCA fund reimbursement process is, therefore, an essential aspect of Michigan's auto insurance system, providing critical financial support to those who have suffered catastrophic injuries in car accidents. The reimbursement ensures that accident victims can access the necessary medical care without facing financial ruin. While the recent deficit has resulted in additional fees for drivers, the MCCA continues to play a vital role in protecting the interests of those who have experienced severe injuries on Michigan roads.

MCCA assessment fee

The Michigan Catastrophic Claims Association (MCCA) fee, or MCCA assessment fee, is an annual charge added to the auto insurance bills of Michigan drivers who have selected unlimited No-Fault Personal Injury Protection (PIP) medical benefits coverage. The MCCA is an unincorporated, nonprofit association that reimburses insurance companies for PIP benefits paid out over a certain amount ($580,000 as of July 1st, 2019) for the medical expenses of catastrophically injured car crash victims. The MCCA fee is the same regardless of the insurance carrier and is paid by drivers on each vehicle on their policy.

The MCCA fee for the period from July 1, 2023, to June 30, 2024, is $122 for drivers with unlimited No-Fault PIP medical benefits coverage, a $36 increase from the previous year. Drivers who selected a different coverage level will be charged a $48 fee. This increase in the MCCA fee is due to the association's investments losing more than $5 billion in value and paying out $3 billion in refunds to drivers, resulting in a $3.7 billion deficit.

In years where the MCCA fund is running a deficit, all drivers are required to pay a "deficit recoupment" fee. The MCCA had previously announced a significant reduction in the per-vehicle assessment for the period from July 2, 2020, to June 30, 2021, lowering the fee from $220 to $100. This reduction was attributed to savings created by cost controls for medical treatment and changes to Michigan's no-fault insurance law.

The MCCA was created by the Michigan legislature in 1978 to ensure that funds are available to cover the medical expenses of catastrophically injured auto accident victims. The selection of coverage limits and the resulting MCCA fee vary from year to year, and drivers are advised to carefully review their insurance options to ensure they have adequate protection.

MCCA insurance requirements

The Michigan Catastrophic Claims Association (MCCA) is a non-profit association created by the Michigan Legislature in 1978 to pay for the car accident-related No-Fault medical expenses of catastrophically injured car crash victims. Michigan is the only state in the US that provides unlimited lifetime coverage for medical expenses from auto accidents.

The MCCA fund reimburses auto No-Fault insurance companies for each Personal Injury Protection (PIP) medical claim paid over a set amount. For instance, as of July 1, 2023, the MCCA will reimburse Michigan auto insurance companies for all medical costs over $635,000.

The MCCA raises funds through an annual assessment charged to auto insurance companies authorized to sell policies to Michigan drivers. This cost is then passed on to drivers in the form of higher auto insurance premiums.

Drivers who select unlimited No-Fault PIP medical benefits will pay the full MCCA assessment, which covers payouts, expenses, and deficit reduction. Drivers who choose to limit their No-Fault protection will only pay the deficit portion of the MCCA assessment to address any deficits incurred by the MCCA.

As of July 1, 2023, drivers with unlimited No-Fault PIP medical benefits will pay an MCCA assessment fee of $122 per vehicle, while drivers with other PIP coverage levels will pay a fee of $48.

Motorcycle drivers are also required to pay the MCCA fee of $122 but will not have the same unlimited medical coverage provided by the Michigan No-Fault policy. They have the option of purchasing additional medical coverage under a separate Michigan motorcycle insurance policy.

Historic vehicles are subject to a reduced assessment, paying only 20% of the full fee, which amounts to $24.40 as of 2023.

Frequently asked questions