$400 auto insurance refunds to begin hitting Michigan mailboxes

Craig Mauger
The Detroit News

Lansing — Drivers are days away from receiving $400 refund checks as the Michigan Catastrophic Claims Association plans this week to complete the transfer of $3 billion in surplus funds to state auto insurers.

In a Monday statement, Gov. Gretchen Whitmer's administration said the checks, which were first announced in December, will "hit mailboxes starting this week."

Insurers must send out the refunds of $400 per vehicle by May 9. The money is expected to be distributed to drivers through paper checks that will be mailed or direct deposited into accounts.

This driver hits the first of two potholes that are four to five-inches deep under the Canadian National Railroad bridge on eastbound 8 Mile Rd. in Detroit just east of Woodward, Wed. March 2, 2022.

"I called for these refunds because I am committed to lowering costs for Michiganders and putting money back in people’s pockets," Whitmer said. "They are possible because we worked across the aisle to pass bipartisan auto insurance reform, and we will keep working together to grow our economy and build a state where families can thrive."

In November, the Democratic governor called on the MCCA to issue refund checks to distribute its $5 billion surplus. Under state law, the MCCA levies an assessment each year to cover claims for those catastrophically injured in car accidents.

The organization's analysis found that about $3 billion of the surplus could be returned to policyholders. The MCCA sought "to issue the largest possible refund to policyholders while maintaining sufficient funds to ensure continuity of care," said a letter from Kevin Clinton, the association's executive director.

The surplus money will be turned over by the MCCA to insurance companies operating in Michigan this week, and the insurers are responsible for issuing checks to eligible policyholders.

The Michigan Department of Insurance and Financial Services has previously said it expects insurers will pass through the returned surplus to policyholders directly in a single, lump-sum amount of $400 per vehicle and $80 per historical vehicle.

"Our goal is to make sure that Michiganders understand the eligibility requirements and to help ensure that this money makes it into consumers’ pockets as quickly and securely as possible," said Anita Fox, the department's director. "DIFS stands ready to answer questions or help resolve any concerns that Michiganders may have regarding their refunds."

Money will go to every Michiganian with an auto insurance policy in force as of 11:59 p.m. Oct. 31.

Eligible consumers who do not receive their refunds by the May 9 deadline should contact their auto insurer or agent, DIFS said Monday.

The MCCA's surplus grew from $2.4 billion at the end of 2020 to $5 billion as of June 30. The estimated surplus resulted savings from reforms to 2019 Michigan's no-fault insurance law and higher than projected investment returns.