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Rate Increase Highlights Need for Auto No-Fault Transparency

LANSING – As of yesterday, all Michigan drivers had an additional $11 added to their auto insurance policies. The cost increase, which comes on the heels of a $30 rate increase last year, is the result of the insurance industry-controlled Michigan Catastrophic Claims Association (MCCA) increasing the fee charged to every Michigan auto insurance policy. The per-vehicle annual fee is now $186.

Coalition Protecting Auto No-Fault (CPAN) president John Cornack points out that the continued rate increases have conveniently come at a time when insurance companies are pointing to increasing auto insurance costs as a reason to justify their proposed no-fault insurance reforms. 

"Every driver in Michigan helps fund the MCCA, which provides important life-saving care to Michigan’s most severely injured accident victims. The problem is this fund is completely controlled by insurance industry executives who refuse to reveal the actuarial data to justify these continued rate hikes,” said Cornack. “There is a real concern that the insurance industry is using these rate increases to bully the public into accepting cuts to their no-fault benefits – cuts that will harm severely injured accident victims and shift millions of dollars of injury care costs onto Michigan taxpayers. Before any sort of major reforms are discussed, there has to be transparency.”

In its quest for increased auto no-fault transparency, CPAN has issued Freedom of Information Act (FOIA) requests to the MCCA as well as Michigan Department of Insurance and Financial Services Director Kevin Clinton. CPAN and the Brain Injury Association of Michigan are currently involved in a FOIA lawsuit against the MCCA, which is awaiting a hearing at the Michigan Court of Appeals. 

The MCCA is a reinsurance fund created by the state legislature in 1978. Each Michigan insurance policy is now charged an annual $186 per-vehicle assessment to fund the MCCA, which helps reimburse insurers for costs above $530,000 for the care and treatment of seriously injured auto accident survivors. About 13,000 accident survivors are provided care through MCCA reimbursements. Last year, the MCCA reported holding $14 billion in assets.
The Coalition Protecting Auto No-Fault: The Coalition Protecting Auto No-Fault is a broad-based coalition of consumer advocate groups, lawyers, doctors, hospitals and other health care providers working together to keep Michigan’s model no-fault insurance law intact.

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Phone: (517) 882-1096
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