The Michigan Catastrophic Claims Association, also known as the MCCA, fee is going up! The current charge is $150 and is going up to $160 on July 1st 2016. The details on this increase can be found at http://www.michigancatastrophic.com/PressReleases/Articles/TabId/173/ArticleId/15/language/en-US/press-release-march-22-2016.aspx.
The MCCA fee is a “per vehicle” charge, so it is paid on each and every vehicle insured to drive on Michigan roads. The fee is included in your insurance premiums and many times it is hidden within the details and not easily discernible. The insurance companies collect the fees on behalf of the association; they do not keep the monies.
At our office we are asked all of the time, what is this? The MCCA reimburses auto no-fault insurance companies for each Personal Injury Protection (PIP) medical claim that is in excess of $545,000. The next question we are asked is, “What is PIP”? Personal Injury Protection, or PIP, pays for all medical bills related to an auto injury; which could mean for the rest of a person’s life when there is a serious injury. We are the only state in the country with these unique and unlimited benefits, which can really make a difference in a person’s life when they are paralyzed as a result of an auto injury.
In 2015 the MCCA suffered claims in excess of 1.1 billion dollars, which was $155 per vehicle insured, hence the increase. The majority of these claims involves brain and spinal cord injuries, multiple fractures, and back and neck injuries. One of the unique challenges faced by the MCCA, auto insurers, and most importantly the policyholders of Michigan, is our rising costs. As the MCCA explains in their press release, “Michigan’s No-Fault law does not include any comparable cost control measures, such as a PPO, unlike health insurance, Medicare, or Worker’s Compensation Insurance.” Incorporating a fee schedule could be a more acceptable change than decreasing benefits and would eventually reduce costs and therefore premiums.
Wendy Beever, ARM, CIC
