Michigan insurance news – no-fault fund transparency

Michigan Auto Insurance news

 

Michigan Auto Insurance newsEvery car in Michigan pays a $175 yearly fee to the Michigan Catastrophic Claims Association. In recent insurance news, one Judge in Ingham county decided that the public fund should be open for review so residents can understand how the fund sets the annual rate.

No-fault and catastrophic loss

The MCCA was created by state legislation to help Michigan insurance companies that pay out more than half a million in claim money to people in car accidents and suffer life altering injuries. This limit is for individual claims. Residents have seen a 67% increase in what they pay in each year since 2008, which is money due on top of what they already pay their insurance carriers for automotive insurance.

The president of the Coalition Protecting Auto No-Fault said, “It’s plain and simple: This is the public’s money and the public has a right to know all the facts about how their money is managed and whether what they pay in premiums is adequate to handle future claims.” At the present time, the law offers unlimited coverage for the lifetime of anyone with medical expenses that come as a result of a traffic accident.

What the fund does

The Michigan Catastrophic Claims Fund covers medical expenses above and beyond $500,000 to accident victims. The amount paid out is not yet subject to a lifetime cap, as can be the practice with paid insurance. If the amount paid by the fund were to be capped, some feel it could cause substantial and damaging financial problems on families facing the long-term care of someone after an accident.

Others believe that because the MCCA is uncapped, excessive payouts are encouraged to those that have been seriously hurt in an accident. These same people believe that insurance customers should have the option to opt for lower amounts of coverage, thus resulting in lower premiums.

The right to know

Overall, transparency is the issue in this insurance news. Judge Canady believes that the residents of Michigan have every right to understand how rates are established so that no-fault can be provided as needed and in a fair manner. Those paying in want to know the money is being used wisely and that victims are cared for but not overly compensated.

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