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Michigan No Fault insurance 6% increase now in effect

July 16, 2013 by Steven M. Gursten

Michigan Catastrophic Claims Association (MCCA)  raises assessment to $186 per year

MCCA increase No Fault insurance

On July 1, Michigan No Fault insurance went up yet again, by 6%. Michigan drivers are now paying $186 per vehicle/per year, compared to  $175.

The latest increase is a 6% increase. Last year, the Michigan Catastrophic Claims Association (MCCA) increased the assessment by 21% to $175.

This portion of your auto insurance is called the MCCA assessment, and it covers your No Fault insurance benefits.

The MCCA may sound confusing, but it’s a relatively easy concept to understand. Drivers pay this annual fee, which goes into the MCCA fund and covers No Fault medical expenses that exceed $530,000 in claims for auto accident victims in Michigan.

Why has the MCCA increased assessments twice in 2 years?

The auto insurance industry spin machine purports that because Michigan is the only No Fault state in the country that provides lifetime necessary medical care  for auto accident related injuries, No Fault insurance costs must increase.

But think twice before you believe the insurance industry spin.

Currently, the auto insurance industry and  Gov. Rick Snyder are proposing No Fault changes under House Bill 4612 that would cap the unlimited lifetime No Fault medical benefits to $1 million. In turn, this would cause a $630 million tax shift from the auto industry to taxpayers (House Fiscal Agency, in its May 30, 2013, 18-page Legislative Analysis of HB 4612) – a giant boondoggle to the already deep-pocketed auto industry.

Under HB 4612, lawmakers are promising a puny, one-time savings of $125 on your No Fault insurance.

So you will save about $10 a month for a year, and in exchange, lose the right to receive lifetime medical care if you’re in a catastrophic auto accident. It’s abhorrent and completely senseless.

Meanwhile, part of HB 4612 includes dismantling the MCCA all together, as the insurance industry claims it is unsustainable. But the insurance industry is fighting hard not to disclose the MCCA numbers so taxpayers can understand what they’re paying and how much is really in the fund.

And the timing of these assessments is just too suspicious, as the insurance industry is pushing hard for changes to Michigan’s No Fault laws now.  I’ve raised the issue before when interviewed on NPR and other media that it is a situation where the fox is guarding the henhouse.

If the MCCA actuarial assumptions and projections are ever disclosed to the public over the insurance industry’s vehement protestations, we may see that the insurance industry was  hiking the MCCA assessment rates as part of the politics of getting the No Fault “reform” legislation it wants so dearly, such as:

  • Angering drivers into thinking they’re paying too much.
  • Having big headlines in the media about huge MCCA assessment increases that you can blame on unlimited medical.
  • And all while, still refusing to disclose the data.

With such tactics, maybe the insurance industry thinks it can then “reform” the insurance system in Michigan and stick taxpayers with the burden of paying for injured auto accident victims’ medical care.

I’m sure if the battle to change No Fault is not over, we may yet see another MCCA assessment increase coming soon next year.

Related information:

4 dirty little secrets about the MCCA assessment increase

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