Auto Insurance Refunds: Michigan's Unique Story

Michigan drivers received $400 refunds per vehicle for auto insurance in 2022. This was due to a surplus at the Michigan Catastrophic Claims Association (MCCA) and a modification in the auto no-fault law. The refunds were part of the 2019 auto insurance reforms, which aimed to reduce the high cost of auto insurance in the state. The reform ended mandatory lifetime coverage for auto crash victims and created new fee limits for medical treatment.

Who is eligible for a refund?

In 2022, eligible Michigan drivers received $400 per vehicle auto insurance refunds. The Michigan Catastrophic Claims Association (MCCA) determined that a $5 billion surplus could be returned to policyholders while ensuring continuity of care for auto accident survivors.

To be eligible for a refund, individuals must have had a car, motorcycle, or RV that was insured to drive legally on Michigan roads as of 11:59 p.m. 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 policies with unlimited Personal Injury Protection (PIP) medical coverage as well as those with lower coverage levels.

Historic vehicles, such as classic cars and motorcycles, are also eligible for a refund of $80 per vehicle. However, trailers are not subject to the MCCA assessment and are therefore not eligible for a refund.

It is important to note that the eligibility criteria specified that only vehicles insured as of 11:59 p.m. on October 31, 2021, would qualify for a refund. Any changes in insurance after this date would not impact eligibility. For example, if an individual sold their car in July and did not have an insured vehicle as of the specified date and time, they would not be eligible for a refund.

Eligible individuals do not need to take any action to receive their refund. The MCCA transferred the surplus funds to insurance companies, who were responsible for issuing checks or ACH deposits to eligible policyholders. However, eligible drivers may wish to verify their address and banking information with their insurance company to prevent delays in receiving their refund.

How much will the refund be?

The refund amount depends on the type of vehicle insured and the number of vehicles insured under the same policy. The Michigan Catastrophic Claims Association (MCCA) has announced that the refund will be $400 per eligible car or motorcycle. Therefore, if you had insurance policies for two cars as of 11:59 p.m. on October 31, 2021, you will receive a refund of $800.

The refund for historic vehicles is $80 per vehicle. Historic vehicles are charged 20% of the annual MCCA assessment due to their limited allowable use.

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

When and how will I get my refund?

The Michigan Catastrophic Claims Association (MCCA) has issued $400 refunds per vehicle to eligible Michigan drivers. The deadline for auto insurers to issue these refunds was May 9, 2022. If you are eligible and have not received your refund, there are a few steps you can take.

First, confirm that you meet the eligibility criteria. To qualify for the refund, you must have had a vehicle insured in Michigan as of 11:59 pm on October 31, 2021. The insurance policy must also meet the minimum insurance requirements for operating a vehicle on Michigan roads.

If you are eligible, the next step is to contact your insurance company to verify that your refund has been issued and that they have your correct and current information. This includes your mailing address and bank account information. If you have moved or changed bank accounts, be sure to provide your insurance company with your new details to prevent delays in receiving your refund.

If you are still unable to resolve the issue with your insurance company, or if they offer your refund in a form other than a paper check or direct deposit, you should report it to the state. You can contact the Department of Insurance and Financial Services (DIFS) at 833-ASK-DIFS or 833-275-3437 from 8 am to 5 pm, Monday through Friday. You can also email DIFS at [email protected].

It is important to note that the refunds will be issued in the form of a check or ACH deposit. If your insurance company attempts to provide your refund as a bill credit, gift card, or discount on future payments, you should contact DIFS for assistance.

Additionally, be cautious of potential fraud. Scammers may attempt to obtain your personal information by claiming that it is necessary to receive your refund. Do not provide personal details such as your address, birthdate, Social Security Number, account numbers, or passwords over the telephone. If you receive such a call, hang up and contact your insurance company directly to verify the legitimacy of the request.

What if I haven't received my refund?

If you haven't received your auto insurance refund, there are a few steps you can take to address the issue.

Firstly, confirm your eligibility for the refund. To qualify, you must have had a vehicle insured in Michigan before 11:59 p.m. on October 31, 2021, with a policy that meets the minimum insurance requirements for operating a vehicle on Michigan roads.

If you are eligible, the next step is to contact your insurance company to verify that your refund has been issued and that they have your correct information. Your refund may have been sent to an incorrect address or conflicting eligibility information may exist.

In the event that you are unable to resolve the issue with your insurance company, or if they offered a refund in a form other than a paper check or direct deposit, you should report the issue to the Michigan Department of Insurance and Financial Services (DIFS). They can be reached at 833-ASK-DIFS (833-275-3437) from 8 a.m. to 5 p.m., Monday through Friday, or via email at [email protected].

Additionally, you can file a complaint with the DIFS online if you require further assistance. It is important to note that eligible Michigan drivers were supposed to receive a refund of $400 per insured vehicle and $80 per historic vehicle, and auto insurers were mandated to issue these refunds by May 9, 2022.

Will my refund be taxable?

The Michigan Catastrophic Claims Association (MCCA) refunds are generally not taxable for most Michiganders. However, if you deducted your auto insurance premiums as a business expense, you may be required to include all or a portion of this refund as income on your tax returns. Please consult your insurance agent or tax professional for more information.

For additional information, refer to the Michigan Department of Treasury Administrative Bulletin RAB 2021-23.

Frequently asked questions