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Bridge Michigan
Michigan’s nonpartisan, nonprofit news source

Michigan drivers to get car insurance refund from $5B surplus

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The Michigan Catastrophic Claims Association said Wednesday it would be moving to issue refunds to state drivers based on 2019 auto insurance reforms.

LANSING—The Michigan Catastrophic Claims Association voted Wednesday to use part of its $5 billion surplus to refund the state’s insured drivers.

The association issued a statement that did not immediately reveal how much refunds will be, or give a timeline on when consumers can expect their checks.


“The goal is to issue the largest possible refunds to consumers while maintaining sufficient funds to ensure high-quality care to those who have been catastrophically injured,” the MCCA board said. 


The refunds come as a result of Michigan’s 2019 auto insurance law, which was passed to lower auto insurance rates by creating a fee schedule to cap benefits and end mandatory lifetime coverages for car crash victims. The law included a refund mechanism to return a portion of surplus funds to motorists. 

Under the law, $80-per-driver refunds were set to be issued in 2022 after an independent audit. But Bridge Michigan calculations estimate the refunds could be significantly higher— ranging from $80 a driver to $700.

MCCA’s vote comes two days after Gov. Gretchen Whitmer, a Democrat, called on the industry-led nonprofit to “immediately” use some of its $5 billion surplus to issue refunds to every Michigander with auto insurance. 

On Monday, MCCA leadership was apprehensive about the idea of issuing larger refunds. Director Kevin Clinton told Bridge then that the surplus could come in handy if the agency had “a bad judicial decision that makes us pay more.”

But on Wednesday the MCCA board decided to support Whitmer’s call.

“While Michigan consumers still have access to the most generous medical benefits through their auto insurance in the nation, there is no doubt that reforms enacted by the Legislature and signed by the governor are working to provide relief to consumers and reduce the cost of auto insurance,” the MCCA statement said. 

“Michigan consumers will continue to be the primary beneficiaries of these important reforms, as they should be.”

Following the commission’s statement, Whitmer issued one of her own, saying the decision will lower the cost of insurance in the state.

“Michiganders have paid into the catastrophic care fund for decades, and these funds from the $5 billion surplus belong in the pockets of Michigan policyholders,” Whitmer said. 

House Speaker Jason Wentworth, R-Farwell, said in a statement this is an example of how no-fault insurance reform is working. The package was introduced and pushed by Republicans in the legislature and signed by Whitmer. 

“I’m glad our reforms have produced large enough savings for the MCCA to act immediately and return that money to the people even sooner,” Wentworth said. 

But the insurance reform law has had its fair share of critics. 

Many have said taking money out of the catastrophic claim funds would be a “slap in the face to the survivors and families who have been begging for relief” from what they say it’s a “care crisis” brought about by the creation of the 2019 law.

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