No-fault insurance rates on the rise

By David Fleet
Motorists are going to pay a few dollars more to cover catastrophic medical claims under the state’s no-fault insurance plan. The double digit increase was announced by the Michigan Catastrophic Claims Association on March 29.
The per-vehicle assessment will be hiked to $192 on July 1, up $22 from $170 currently, the MCCA reported. The 13 percent increase, comes after a 6.3 percent increase in 2017.
The association said the increase is necessary because of higher-than-anticipated claims costs, partly offset by better-than-expected investment returns. The majority of catastrophic claims involve brain and spinal cord injuries, multiple fractures, and back and neck injuries. In 2017, the MCCA paid out $1.2 billion ($160 per insured vehicle) for claim costs resulting from catastrophic injuries, according to the report.
Michigan’s system is unique in that it provides for unlimited, lifetime medical auto insurance benefits for catastrophic claims. The fee covers benefits that exceed $550,000 per claim, the MCCA said.
The second increase in the last two years drew the ire of local lawmakers.
State Rep. Joe Graves (R) 51st District which includes Argentine, Atlas, Fenton, Flushing, Gaines townships, the Village of Goodrich and the cities of Linden and Fenton, in addition to Groveland, Holly and Rose townships in Oakland County has been working to curb the increases.
“Michigan drivers are outraged with yet another fee increase to the Michigan Catastrophic Claims (MCCA) fund and it is time the Michigan Legislature open the books on this association,” he said in a statement to The Citizen. The (MCCA) board is made up of auto insurance companies who manage the fund and we continue to see auto insurance rates rise year after year. There is a complete lack of transparency with the association, as they have continuously refused to open their books or show us any of their assumptions.”
Graves previously sponsored bills, including HB 4672 that would establish a balanced fraud authority funded by insurance company assessments and would hold all parties accountable.
“I believe would be a great first step in lowering rates and I have fought for this bill for the last two terms, yet insurance lobbyists have continued to block it. I will continue to push for sensible legislation to keep drivers protected, rates low, and hold insurance companies accountable.”
While the increase in insurance costs are often not popular—industry members say the hike is necessary.
Walt Renn, owner of Renn Insurance, 1839 S. Ortonville Road, Ortonville has been an independent agent for more than 30 years says the no-fault laws benefit many people.

“The MCCA provides unlimited medical benefits if you’re injured in an accident,” said Renn. “It’s difficult for insurance companies to calculate just how money is necessary to care for someone their whole life.”
The rate hikes are due to higher medical costs, said Renn.
“The 13 percent increase is not that much, considering the costs of health care,” he said. “Not to mention the number of people collecting from the MCCA is also a factor. Determining a cost is like hitting a moving target. The insurance company is responsible for collection of the money and have to assure there is adequate funds.”