Drivers’ catastrophic care fund fee to go up $10 annually per car
Lansing — Michigan motorists will see a $10 increase in their annual auto insurance premiums in July to pay rising costs associated with the state’s catastrophic accident fund.
The Michigan Catastrophic Claims Association’s board has hiked its annual assessment by $10 to $160 for each insured vehicle in the state to cover major medical claims and chip away at an estimated $1.3 billion deficit in the fund.
The per-vehicle assessment is increasing because the fund’s investment returns were less that anticipated, according to the association.
The increase comes after the association lowered the assessment by $36 last year after better investment gains in 2014. The $1.1 billion spent in 2015 on claims amounted to $155 per driver, $5 more than the assessment, according to association data.
All auto insurance companies operating in Michigan are required to pay the assessment. Insurers pass along the costs to vehicle owners in annual assessments that are charged from July 1 through June 30 each year.
The assessment is part of Michigan’s no-fault auto insurance law requiring unlimited lifetime coverage for medical expenses for auto accident victims.
Legislation to rein in Michigan’s unlimited medical benefits is stalled in the Legislature.
According to the association, about $140.26 of this year’s assessment will be spent on new personal injury medical benefit claims, $19.34 goes toward reducing the unfunded liability deficit and 40 cents from each insurance plan pays for administration of the fund.
History of Michigan’s per vehicle catastrophic claims assessment:
Source: Michigan Catastrophic Claims Association