As Michiganders, we are familiar with the intricacies of our state's auto insurance system and the ongoing efforts to balance affordability with comprehensive coverage. On July 1, 2023, an increased Michigan Catastrophic Claims Association (MCCA) fee will be assessed on drivers choosing PIP for "deficit recoupment." This blog post aims to shed light on this fee, explaining its purpose, implications, and what it means for all residents of the state.

What is the MCCA Fee?

The MCCA fee is an essential component of Michigan's auto insurance system. It is a fee that is added to each vehicle's insurance policy to fund the MCCA, which provides unlimited personal injury protection benefits to individuals involved in catastrophic accidents. The MCCA fee helps cover the costs associated with these catastrophic claims, ensuring that accident victims receive necessary medical care and support.

Changes in Fee Amount: The MCCA fee is subject to annual adjustments based on the MCCA board's assessment of anticipated costs. It is essential to stay informed about any changes to the fee amount and understand how they may impact insurance premiums.

Last Fall, the Michigan Catastrophic Claims Association decided to raise its annual per-vehicle assessments on all Michigan auto insurance policies effective July 1, 2023 as follows:

• Drivers choosing unlimited, lifetime medical coverage — known as personal injury protection, or PIP — will be charged $122, up from $86.
• Drivers choosing any other PIP option, including zero-dollar PIP, will be charged a $48 assessment for "deficit recoupment."
• Drivers who choose an option besides unlimited pay no MCCA assessment or fees but are still responsible for the "deficit recoupment".

Fee Amount: The MCCA fee is a fixed amount added to each vehicle's insurance policy. The fee is determined annually and is set by the MCCA board. The last full MCCA assessment that all drivers paid was $220 for the 2019-2020 fiscal year. After, those who chose PIP options other than unlimited no longer had to pay the MCCA assessment. But those drivers are still responsible for MCCA deficit recoupment fees. It covers the anticipated costs of catastrophic claims for the upcoming year. The fee amount for each vehicle is a fixed rate and does not change based on vehicle type or insurance company.

Purpose: The primary purpose of the MCCA fee is to provide funding for catastrophic claims that exceed the limits of individual auto insurance policies. It ensures that individuals involved in severe accidents have access to necessary medical treatment, rehabilitation, and long-term care without financial limitations.

Fee Collection: The MCCA fee is collected by insurance companies in Michigan. It is typically included as a separate line item on insurance premium statements. Insurance Carriers are responsible for remitting the collected fees to the MCCA.

Access to Comprehensive Coverage: The MCCA fee plays a critical role in ensuring that Michiganders have access to unlimited personal injury protection benefits in the event of catastrophic accidents. This provides peace of mind, knowing that necessary medical care and support will be available without financial constraints.

The Michigan Catastrophic Claims Association (MCCA) fee is an integral part of the state's auto insurance system. It ensures that Michiganders have access to unlimited personal injury protection benefits in the event of catastrophic accidents. While the fee adds to the overall cost of insurance, it serves a crucial purpose in providing necessary medical care and support to accident victims. As responsible drivers, it is important for all Michiganders to stay informed about the MCCA fee, consider it when evaluating insurance options, and be aware of any changes in the fee amount. By understanding the MCCA fee, we can make informed decisions and ensure adequate protection for ourselves and our loved ones on the roads of Michigan.