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Lawyers argue no-fault insurance fee should be lower

Mar 13, 2015

Credit Robbie Howell / Flickr - http://j.mp/1SPGCl0

Some lawyers say the Michigan Catastrophic Claims Association should lower the annual fee for Personal Injury Protection in the coming year.

According to the MCCA, "all auto insurance companies operating in Michigan are required to pay the assessment to the MCCA to cover the cost of Personal Injury Protection (PIP) benefits guaranteed under Michigan’s no-fault insurance law. PIP coverage is mandatory and provides for the payment of unlimited, lifetime medical auto insurance benefits.

 The cost of these benefits is reflected in the insurance premiums all Michigan policyholders pay. The MCCA assessments are used to reimburse auto insurance companies for PIP benefits paid in excess of $530,000 per claim."  The majority of these catastrophic claims involve brain and spinal cordinjuries, multiple fractures, and back and neck injuries, according to the MCCA. A five-person board (comprised mostly from the insurance industry) manages the MCCA fund.

The MCCA will soon announce the fee auto-owners will pay for Personal Injury Protection benefits for the next fiscal year beginning July 1.

Credit From the Michigan Catastrophic Claims Association

That fee has been rising every year since 2008.

Investments in the stock market have bolstered the fund. The deficit is down and reserves are up.

Attorney Todd Berg with Michigan Auto Law says it’s time to lower the annual fee

“Under the circumstances here where the finances are looking very strong and robust for the MCCA, this would be a good time to maybe pull back," Berg said.

The MCCA is expected to announce the new fee soon.