Insured motorists will be getting money back for each of their covered vehicles.
Michigan drivers will be receiving $400 in auto insurance refunds for each insured vehicle from the Michigan Catastrophic Claims Association.
Governor Gretchen Whitmer and the state Department of Insurance and Financial Services made the announcement.
The auto insurance refunds will total about $3 billion. Drivers in the state can expect to receive the checks within the first half of next year, said the news release from the governor. Whitmer first made the call for the refunds at the start of November, stating that the Michigan Catastrophic Claims Association Fund (MCCA) surplus had risen to $5 billion since her initial signing of the bipartisan auto insurance legislation into law in 2019.
As was reported by Live Insurance News when Whitmer first called for the fund to send the checks to the drivers, the intention of the law had been to reduce premiums and provide drivers with options for reduced medical coverage while substantially boosting medical fee schedules for long-term medical care.
The checks for the auto insurance refunds will be issued at some point in next year’s second quarter.
The MCCA is a non-profit corporation under the insurance industry’s control. It is responsible for the management of a fund designated for paying for catastrophic care. The fund currently has assets of over $27 billion which were accumulated by way of surcharges that were once applied to the premiums covering all insured vehicles in the state.
“These refunds and the recently announced statewide average rate reductions are lowering costs for every Michigan driver,” said the governor in a recent news statement. “Michiganders have paid into the catastrophic care fund for decades, and I am pleased that the MCCA developed this plan so quickly after unanimously approving my request to return surplus funds to the pockets of Michiganders.”
An analysis conducted by the MCCA determined that it could issue the current $3 billion surplus in auto insurance refunds “while ensuring continuity of care for auto accident survivors,” said a statement from the governor’s office. The checks are expected to be particularly helpful to Detroit drivers, who “have paid the highest insurance rates in the nation for decades,” said Lieutenant Governor Garlin Gilchrist.