Still waiting on $400 auto insurance refund? Here's what drivers should know

Beth LeBlanc
The Detroit News

Michigan drivers who have not yet received their $400 per vehicle insurance refund should hold tight about another month while insurers get those checks in the mail, state officials said.  

Insurers, which were transferred about $3 billion in early March to disburse refunds, have until May 9 to complete the distribution of refunds to Michigan drivers, according to the state. 

The Michigan Catastrophic Claims Association transferred the about $3 billion total to insurers March 7 and insurance companies are required to distribute the money via $400 refunds per vehicle through check or direct deposit. The distribution includes about 7.5 million policyholders. 

Insurers were asked to distribute the refunds "as soon as they can, but no later than May 9," said Michigan Insurance and Financial Services Director Anita Fox. 

"Depending on the processes they have to put in place, it may take some insurers longer than others," Fox said.

The Insurance Alliance of Michigan would not say how many of its members had distributed the refunds Thursday but said the companies were "working diligently" to get the money out. 

"The great news is that insured drivers don’t have to lift a finger to receive their refund," said Erin McDonough, executive director for the Insurance Alliance of Michigan. "If anyone tries to contact a driver asking for personal information related to their refund – it's a scam.”

Gov. Gretchen Whitmer called on the MCCA to issue refund checks and distribute its $5 billion surplus in November. The association, which levies assessments to cover claims for people injured in catastrophic car crashes, found it could return about $3 billion in surplus to policyholders through individual refunds. 

The association's surplus grew from $2.4 billion in late 2020 to $5 billion as of June 30, in part due to the 2019 no-fault auto insurance reforms and higher-than-expected returns. 

The 2019 no-fault auto insurance reform has been under scrutiny for months because of provisions that took effect in July that made significant cuts to the fee a medical care provider could be reimbursed by insurance companies for providing care for individuals who were catastrophically injured. 

The cuts have led some medical providers to close their doors or stop taking auto accident survivors, forcing some of those victims out of their homes and into facilities or hospitals.

Who is eligible for the refund?

The refund will be distributed by insurance companies to clients who had a car insured with the company as of Oct. 31, 2021. Most individuals — including those with motorcycles or RVs — will receive the full $400 refund while those with an insured historic vehicle will receive $80. 

Individuals who were "garaging" vehicles as of Oct. 31, 2021, without policies on the car will not receive a refund. 

"It only applies to those who were paying the premiums to drive their vehicles on Michigan roads," Fox said. 

How will the refund be sent?

The money is expected to be distributed to drivers through paper checks that will be mailed or direct deposited into accounts.

What if the refund doesn't arrive?

Check to make sure the refund wasn't direct deposit into an account. If not, individuals who don't receive their refund by May 9 should contact their insurance company or call the state at (833) ASK-DIFS. 

"DIFS stands ready to answer questions or help resolve any concerns that Michiganders may have regarding their refunds," Fox said in early 

Should I give out personal information if called?

Fox and Michigan Attorney General Dana Nessel have warned against giving out personal information over the phone to callers who may purport to be processing a refund. She said there have been reports of scammers attempting to take advantage of those awaiting their refunds.

"People should never give out their personal information over the phone from an unsolicited call," Fox said in early March.

eleblanc@detroitnews.com

Staff Writer Craig Mauger contributed.