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Michigan auto insurance fee for unlimited medical coverage will drop

The 14% decrease means drivers will pay $86 a year
Published: Nov. 25, 2020 at 4:48 PM EST
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LANSING, Mich. (AP) - Michigan drivers who want unlimited personal injury protection benefits will pay $86 a vehicle starting next summer, down from $100 currently.

The fee was mandatory for decades but became optional beginning in July under a change in state law.

The Michigan Catastrophic Claims Association, a state-created nonprofit entity that reimburses auto insurers for medical claims surpassing $580,000, announced the 14% fee reduction Wednesday. The reduction takes effect with policies renewed or started after July 1, 2021.

This is the second decrease in the catastrophic claims fee. It dropped by more than half on July 2 from $220 annually per vehicle to $100 annually.

The association said the fee reductions are primarily due to health care cost controls and other changes in the 2019 law enacted by Democratic Gov. Gretchen Whitmer and the Republican-led Legislature.

“In these difficult times, it is more important than ever that Michiganders see rate relief. I’m pleased that these reforms are continuing to result in greater savings than required in the law,” Whitmer said.

Michigan House Speaker-elect Jason Wentworth, a Republican from Farwell, said the rate reductions came catastrophic claims fee reduction comes on top of other auto insurance rate reductions included in the 2019 law.

“Especially in these uncertain times, it’s more important than ever that Michigan drivers keep as much of their hard-earned income as possible,” said Wentworth. “The reforms adopted by the Legislature continue to save money for Michigan drivers and their families – and the changes will have long-lasting benefits for years to come.”

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