Theis: MCCA Fee Increase Shows How Broken Auto Insurance System Is
March 28, 2019
A local lawmaker says the recent announcement that Michigan's mandatory fee to cover unlimited medical benefits for injured drivers is rising to a new record high and makes it even more clear how desperately broken and unsustainable the auto insurance system is.
Michigan is the only state to require unlimited lifetime coverage for medical expenses resulting from auto crashes. The Michigan Catastrophic Claims Association announced Wednesday that the annual fee included in auto insurance premiums is rising from $192 annually per insured vehicle to $220, starting in July. That’s more than double what it was a decade ago. The fee revenue largely covers care for people with brain, spinal cord, back and neck injuries. The Legislature, where majority Republicans says reducing high auto premiums is a priority, is considering ways to rein in costs but has been at odds over proposals to do so. Republican Senator Lana Theis of Brighton Township says Michigan drivers already pay the highest auto insurance rates in the nation and starting July 1st, that price is going to increase even more due to the MCCA assessment increase. Over the last several weeks, she says they’ve been hearing testimony about Michigan’s no-fault system and the different cost drivers behind the high rates. Theis says it has been made abundantly clear that the sky-high auto insurance rates are an issue that impacts all Michiganders. Theis says lowering the cost of car insurance rates is her number one priority. She is asking residents to share their stories about what lower rates would mean for them and their family each month on the website www.IfMiRatesWereLower.com. The link is provided. Theis championed auto insurance reform efforts and sponsored legislation during her time last year while serving as a state representative but no agreement was reached in the legislature.
Meanwhile, Governor Gretchen Whitmer is ordering an audit as the last time the association's operations were thoroughly reviewed was 2015. She says Michiganders "deserve to know why they are being forced to shell out hundreds of dollars in additional fees for car insurance." The organization says the fee hike is due to a higher number of claims, rising medical care costs and lower-than-expected investment earnings. (JM)