Auto insurance refunds in Michigan? How much you’d get under Whitmer request


Lansing, Michigan. Governor Gretchen Whitmer on Monday called for express drivers insurance of up to $675 per vehicle.

In a letter to the Michigan Catastrophic Claims Association, the Democratic governor cited a $5 billion surplus she attributed to overcharging and a 2019 law that cuts insurance companies’ medical costs for people injured in accidents. The surplus was up from $2.4 billion a year earlier, according to a report released in the summer. She also said that many residents have faced financial hardship during the COVID-19 pandemic.

The association is a state-created nonprofit entity that reimburses auto insurance companies for health care claims in excess of $600,000. Michigan used to require motorists to pay a unique annual fee per vehicle for unlimited health coverage until the law was passed.



Related: Michigan governor pays drivers refunds from $5 billion in auto insurance fund


The fee once exceeded $200 before dropping over two years to currently $86. Coverage is optional as of last year, although about 80% of drivers kept it.

Every insured motorist will be eligible for a refund.

“Insurance companies should not hold billions of surplus funds to invest for their own profits or be contingent on policy renewal. The surplus goes to Michigan policyholders and should be returned to them immediately in full, in the form of refund cheques.

MCCA CEO Kevin Clinton said the board, which is made up almost entirely of insurers, would consider the request but that not having a surplus would be “extremely dangerous”.


“The governor’s proposal is higher in terms of money flowing in and faster than what the law says it ought to be. … I don’t think we would likely go that far, even if the council decided something, because that would leave us no surplus at all,” he said. .

Under the 2019 law, a state insurance manager must appoint an independent actuary starting next year and every third year following an MCCA review. If the review – due by September – shows that MCCA’s assets exceed 120% of its liabilities, the difference must be returned.

“If we applied the equation in the platform and applied it to today’s numbers, that would mean about $100 per vehicle,” Clinton said.

The insurance industry has said it supports refunding drivers, but potentially accelerating the timeframe will make it even more important to stay on track with the law, which includes lowering what insurers can pay to reimburse medical fees.


The No-Fault Auto Protection Alliance, a group of health providers and plaintiffs’ attorneys who opposed the 2019 law and lobbied for changes, criticized Whitmer’s move. She said her administration should do more to investigate whether insurance companies are overcharging motorists when claims drop in the pandemic.

“The governor’s announcement appears intended to distract us from the real issue – the fact that survivors of catastrophic auto accidents are suffering under the new law, and auto insurers continue to persuade consumers,” said President Devin Hutchings.


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