Legislative Reforms Success: Michigan’s Catastrophic Claims Auto Fee To Be Cut In Half Or Eliminated

Michigan drivers will see their catastrophic claim fee cut in half or eliminated in the coming year, in what advocates say is proof that reforms adopted in May are working to lower costs to drivers.

Drivers who choose unlimited, lifetime medical benefits will pay $100, down 55% from $220, and drivers who choose other tiers of coverage will pay no fee, according to the Michigan Catastrophic Claims Association. The fee schedule is applicable from July 2, 2020, through June 30, 2021.

The fee reflected in all Michigan premiums pays for catastrophic car crash injuries and is overseen by the Michigan Catastrophic Claims Association, a group created by the Legislature in 1978.

The association reimburses auto insurance companies after a certain threshold — set at $580,000 this year — is reached for medical costs.

The changes are expected to reduce the association’s overall assessment by $1 billion and erase the group’s $2 billion deficit, according to a statement from the MCCA.