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Michigan drivers to get insurance refunds of $400 per car from trust fund

May 19, 2022: Michigan Republicans OK $2.7B tax cut. Whitmer wants a $500 rebate.
March 11. 2022: Here’s when you will get your $400 car insurance refund in Michigan

LANSING — An insurance agency trust fund will return about $3 billion in surplus fees to Michigan drivers by issuing refunds of $400 per vehicle next year. 

Gov. Gretchen Whitmer, who in November urged refunds from the Michigan Catastrophic Claims Association, said Tuesday that drivers should expect to receive checks in the second quarter of 2022, likely April or May.

Whitmer credited 2019 auto insurance reforms that were designed to drive down what have been the highest rates in the nation by ending mandatory lifetime coverage for auto crash victims and creating new fee limits for medical treatment.


“These refunds and the recently announced statewide average rate reductions are lowering costs for every Michigan driver,” she said in a statement. "We are working together to put Michigan drivers first."

The Michigan Catastrophic Claims Association is an industry-led nonprofit that collects an annual fee from all Michigan motorists to cover large medical care bills for severely injured crash victims.

The group last year cut its annual fee that insurers pass on to motorists from $220 to $100. And yet its surplus more than doubled from $2.4 billion to $5 billion the same year.

The COVID-19 pandemic may have played at least some role, as fewer drivers were on the roads in 2020 during the state's stay-home order.

Whitmer and fund executives say the surplus is largely the result of the 2019 law, including a controversial fee schedule that limits the amount medical providers can charge insurers for auto accident claims. 

That fee cap only took effect in July, but it allowed the trust fund to lower its long-term liability projections, leading to a larger surplus, its executive director, Kevin Clinton, told Bridge Michigan in November.

Critics fear the fee schedule will force specialized rehabilitation facilities and in-home caregiver companies out of business, ultimately creating a “second tragedy” for crash victims who can require lifetime services.

The $3 billion refund will leave the fund with a $2 billion surplus. According to Whitmer’s office, an analysis determined that will ensure "continuity of care for auto accident survivors” whose medical bills are paid for by the fund.

Under a plan submitted to the state insurance department on Monday, the fund will issue a refund to every Michigan resident who had an auto insurance policy as of October 31. Drivers do not need to take any action. 

The claims association will transfer surplus funds to individual insurance companies on March 9, and the Michigan Department of Insurance and Financial Services will then give insurers up to 60 days to issue refunds to eligible policyholders. 

“In the coming months, DIFS will work to ensure that refund checks are issued to Michigan consumers as quickly as possible," state insurance department director Anita Fox said in a statement.

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