What is the Michigan Catastrophic Claims Association
The Michigan Catastrophic Claims Association (MCCA), a private non-profit unincorporated association, created by the state Legislature in 1978. Michigan’s the only state where auto insurance no-fault law provides unlimited lifetime coverage for medical expenses from auto accidents. The MCCA fund will reimburse auto no-fault insurance companies for each Personal Injury Protection (PIP) medical claim paid more than a set amount. Currently, MCCA will reimburse Michigan auto insurance companies all medical costs over the $580,000 total.
Who Funds the Michigan Catastrophic Claims Association?
All auto insurance companies operating in Michigan pay to cover the catastrophic medical claims occurring in Michigan. All auto insurance policyholders pay for the assessments. Every Michigan insured will have to pay $220.00 per vehicle. The 2019 assessment represents $177.00 to cover anticipated new claims and expenses and $43.00 to address a $3.9 billion estimated deficit related to existing claims. The current assessment period is effective July 1, 2018, to June 30, 2019. This assessment will increase $28 to $220, effective July 1, 2019.
Exceptions from the Michigan Catastrophic Claims Association:
- Historic vehicles will only pay 20 percent of the full assessment charged for vehicles effective July 1, 2003. The assessment for historic cars for 2019 is $44.00.
- Motorcycles also have to pay into the fund but, motorcycles are not a motor vehicle under the no-fault law. Motorcycle drivers will not have the same unlimited medical coverage provided by the Michigan no-fault policy. Insureds have the option of purchasing additional medical coverage under a Michigan motorcycle insurance policy.
Michigan Catastrophic Claims Association controversy:
Currently, there continues to be controversy surrounding the Michigan Catastrophic Claims Association because only a small number of drivers receive these benefits in comparison to the drivers paying into the fund. Plus Michigan is the only state in the country proving this type of unlimited medical coverage.
Since 1979, more than 38,407 catastrophic claims have been reported to the MCCA. Based on current estimates, the total claims paid, including the future payments for the 16,998 remaining active claims, is expected to exceed $85 billion. This figure assumes inflating costs for products, services, and accommodations necessary for the care, recovery, and rehabilitation of injured persons throughout their lives.