Guess What? Your Michigan Auto Insurance Bill Is Rising Again in July

Just when you thought your auto insurance bill couldn't possibly get any higher, since we're already paying the highest rates in the nation, along comes the Michigan Catastrophic Claims Association with the revelation that they will be increasing the per-vehicle fee by another $28...jacking it up to $220.00 per vehicle.

The Insurance Alliance of Michigan immediately responded calling it "adding insult to injury in a state saddled with the highest auto insurance premiums in the country." The vehicle assessment fees go into a fund that covers the cost of medical care for people injured in car accidents when the cost of medical care exceeds $580,000.

Tricia Kinley is Executive Director of the Insurance Alliance of Michigan. She contends, “The per-vehicle fee increase underscores the urgent need to reform Michigan’s broken, outdated auto no-fault system, which continues to overburden drivers,” adding, “The fact that medical providers can dramatically overcharge for medical procedures when someone is injured in a car accident has caused the cost of medical care to increase exponentially in Michigan, while the MCCA struggles to keep up.”

Much of the recent testimony in the Senate Insurance and Banking Committee, which has held hearings on auto no-fault reform for the last two months, has centered on Michigan’s unlimited, lifetime medical benefit and a lack of cost controls to rein in overcharging by medical providers. In one example, a medical provider charged more than $5,000 for an MRI when that exact same procedure, at the same location and on the same machine, costs $500 under Medicare.

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Kinley charges, “It’s time the Michigan Legislature sees the state’s auto no-fault system for what it is: A failed policy experiment that has forced drivers from Metro Detroit to the Western Upper Peninsula to choose between paying their auto insurance premium or buying groceries. For some, it’s like a second mortgage.” Kinley concludes, “Drivers across the state are demanding reform and we urge the Legislature to listen to their pleas for help and to pass real reforms to lower the cost of auto insurance.”

The Michigan Catastrophic Claims Association oversees a fund that reimburses auto insurance companies when the cost of medical care exceeds $580,000. Michigan is the only state in the nation that requires such a fund because it’s the only state that requires drivers to purchase unlimited, lifetime medical benefits with their auto insurance policy.

A recent study conducted by the University of Michigan found that auto insurance is unaffordable for drivers in 97-percent of the state’s zip codes.

Kinely argues, “Michigan’s auto insurance companies dislike charging consumers this per-vehicle fee as much as drivers dislike paying it, which is why we’re calling on the Legislature to continue to explore ways to lower the cost of auto insurance for drivers across the state.”

The per-vehicle fee increase, which is assessed to every car insurance company doing business in Michigan and charged to consumers, will take effect on July 1, 2019.

IAM is a government affairs and public information association that represents auto, home and business insurance companies and related organizations operating in Michigan. You can learn more about IAM and its members on Facebook, Twitter or online at