LANSING, Mich. (WJRT) – The Michigan Catastrophic Claims Association’s annual auto insurance rating will increase for policies renewed after July 1, 2023.
The association has approved a 42% increase in its rating for drivers who choose unlimited injury protection. This rate will go from $86 per year to $122 next summer.
Drivers who choose no injury coverage or limited coverage will pay a reassessment of $48 for deficit reduction. This charge is currently zero.
The Catastrophic Claims Association reimburses auto insurers for any claim over $600,000. The association says the fee increases are due to an estimated $3.7 billion shortfall in its fund.
The association says most of the shortfall was caused by a Michigan Court of Appeals ruling in August that insurance companies cannot reduce reimbursement rates for claims filed before the reform law. of Michigan Auto Insurance 2019.
The law imposed reductions in the amount that family members and home helpers could bill for ongoing health care. But the court ruled that these reductions could only be applied to claims filed after the law was enacted in 2019.
The Michigan Catastrophic Claims Association hopes to appeal the rate cut decision to the Michigan Supreme Court.
The association also attributed part of the shortfall to weaker-than-expected investment returns in the stock market, which has been losing value for much of this year.
The auto insurance valuation increase comes less than five months after insurance companies finished reimbursing Michigan drivers from the Catastrophic Claims Association just over $3 billion.
The association declared a $5 billion surplus last fall and agreed to return $3 billion of that to drivers in the form of refunds issued by auto insurance companies. The payments were issued from March to May last spring.
The association kept the remaining $2 billion of the surplus to pay pending claims.