By Kelly Hudson, CIC
March 23, 2021
Beginning July 2021, the the Michigan Catastrophic Claims Association (MCCA) fee will drop below $100 for the first time in nearly 20 years. Their fee for the July 1, 2021 – June 30, 2022 period is dropping down to $86 per vehicle. This is the second consecutive year for decreases in the fee; for the 2020-2021 year, it was $100 per vehicle.
The MCCA fee applies only to vehicles that have Unlimited Personal Injury Protection (PIP). Due to the changes in Michigan’s No-Fault Law in 2020, people have the option to select PIP limits other than Unlimited. Those other options are: $500,000; $250,000; $50,000 with Medicaid; or opting out with a qualified health plan or Medicare with Parts A & B. For those who select a lower option, the MCCA fee does not apply. Vehicle owners who are eligible to opt-out of all medical benefits from their auto insurance policy are also exempt from the MCCA fee.
HISTORY
From 1973 through June 2020, Michigan’s no-fault insurance law required all policyholders in Michigan to buy unlimited PIP coverage. The MCCA was created in July of 1978 to reimburse insurance companies for amounts paid in PIP benefits over an amount deemed as “catastrophic” under the no-fault insurance law. Currently that amount is $580,000. That means that the insurance company pays the entire claim under policies providing unlimited lifetime coverage, but is reimbursed by the MCCA for medical costs over $580,000. The MCCA created an assessment to cover these reimbursements for catastrophic losses; however, the growing costs of these fees is part of what prompted the no-fault reform which passed in 2019 and went into effect in 2020. In 1978, the fee was just $3 per vehicle and it hasn’t been less than $100 since 2002. Policyholders will see this new reduced fee on their policy once it renews after July 1, 2021.
MCCA per vehicle fees over the past 10 years:
- 2021 $86
- 2020 $100 (no-fault reform began)
- 2019 $220
- 2018 $192
- 2017 $170
- 2016 $160
- 2015 $150
- 2014 $186
- 2013 $186
- 2012 $175
- 2011 $145
The MCCA has paid out more than $1.3 billion in claim payments from 1990 – 2020 alone averaging around $107 million per month. The total amount paid out since the MCCA was established in 1978 is $19.1 billion.
For more information on the MCCA, visit their website. If you’d like more information on the PIP options available to you, call 989-772-2977 and an agent at Mt. Pleasant Agency – Central Insurance can go over your options including the benefits and risks that go along with each one.