Skip to main content

Understanding the MCCA Assessment Change on July 1, 2023: What Michigan Drivers Need to Know

By June 14, 2023June 21st, 2023Automobile, MCCA, Michigan Auto Insurance

SR-22 - Closeup View of a Man Driving His Vehicle with Outside of Car Out of Focus at DuskOn July 1, 2023, Michigan drivers will experience a change in the Michigan Catastrophic Claims Association (MCCA) assessment charged per vehicle. This increase in fees is mainly due to higher-than-anticipated claims costs and lower investment returns. In this blog post, we’ll break down what the MCCA is, discuss the upcoming change, explain the recoupment fee, and explore how this change will impact you, the consumer. This increase in charges will affect your policy at the first renewal after 7/1/23.  

What is the MCCA? The MCCA was created in 1978 to help insurance companies in Michigan cover the costs of providing unlimited lifetime medical benefits for people who suffer catastrophic injuries in car accidents. Every insurance company that sells car insurance in Michigan must be a member of the MCCA, which is a non-profit organization.

What is the MCCA Assessment Change? Starting on July 1, 2023, the MCCA assessment charged per vehicle will be $122 for unlimited Personal Injury Protection (PIP) coverage and $48 for all other PIP coverage options. In 2022, the charge was $86 per vehicle for unlimited PIP coverage, with no charge for other PIP coverage options. 

Why is this change happening and what is the Deficit Recoupment Fee?

The increase in the MCCA assessment is due to three main factors:

  1. A court decision in summer 2022 that overturned some no-fault medical cost controls for crash victims, resulted in a projected loss of $3.7 billion.
  2. Recent declines in the stock market, causing a $2.8 billion loss.
  3. The cost of the $400 per-vehicle refund checks last spring, prompted by an earlier surplus, resulting in a $3.1 billion loss.

As a result of these factors, the MCCA is charging a deficit recoupment fee of $48. This fee aims to help cover the losses mentioned above.

How will this change impact consumers? Michigan drivers will see an increase in the assessed fee on the auto insurance coverage starting on July 1, 2023. This increase is directly related to the change in the MCCA assessment and the introduction of the recoupment fee.

Conclusion: The upcoming MCCA assessment change and the introduction of the recoupment fee will affect Michigan drivers in the form of higher auto insurance premiums. It’s essential to be aware of these changes and understand the reasons behind them. As a consumer, staying informed will help you make the best decisions regarding your auto insurance coverage. 

There are a few additional points to consider as a Michigan driver in light of the MCCA change:

  1. Review your current auto insurance policy: It’s a good idea to review your existing policy to ensure you have the appropriate level of coverage. With the upcoming changes, you might want to reassess your needs and consider if adjusting your PIP coverage is an option. We still recommend unlimited PIP coverage, as it’s one of the best ways to insure you’re taken care of in full after an accident, but if it’s becoming cost prohibitive, you can make changes.
  2. Contact your agent: While all insurance companies in Michigan are affected by the MCCAOur-Business-Partners-Group-of-Co-Workers-Sitting-an-Engaging-in-Best-Business-Practices charge change, the impact on individual premiums may vary. As an independent insurance agency, we represent multiple insurance companies. We can compare your rates with all of our providers to find the best coverage at the best rate for your specific need
  3. Stay informed about legal developments: The Michigan Supreme Court is currently considering an application for leave to appeal the Andary decision, which contributed to the MCCA’s financial deficit. Keep an eye on the proceedings, as any changes resulting from the appeal could potentially impact the MCCA assessment and the recoup fee.
  4. Reach out to your insurance agent or company: If you have questions or concerns about the MCCA charge change and how it may impact your auto insurance premium, don’t hesitate to contact your insurance agent or company. They can provide you with personalized information and guidance based on your specific situation.

By staying informed about the MCCA charge change and taking appropriate actions, you can better navigate the changes in the auto insurance landscape and make well-informed decisions for your coverage needs.