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MCCA Slashes Vehicle Assessment 55% Following No-Fault Reform

MCCA Slashes Vehicle Assessment 55% Following No-Fault Reform

The Michigan Catastrophic Claims Association Wednesday lowered to $100 the per-vehicle assessment for the period of July 2, 2020 through June 30, 2021. The new fee is a reduction of 55%. 

"The 55% reduction results directly from savings created by the cost controls for medical treatment and other changes made to Michigan's no-fault insurance law on June 11, 2019. These changes are estimated to erase the MCCA's deficit of approximately $2 billion and reduce the annual MCCA assessment by approximately $1 billion," reads the MCCA statement.

Under the new no-fault law, insurance companies will charge the $100 per vehicle assessment only to drivers who choose to maintain unlimited lifetime personal injury protection (PIP) benefits. 

Those who choose lower limits under Michigan's revised no-fault insurance law avoid the assessment altogether, as long as the MCCA is not in a deficit position. 

Gov. Gretchen Whitmer applauded the reduction. 

"Today's reduction by the MCCA demonstrates that our historic bipartisan legislation will provide real savings to Michigan drivers," said Whitmer. "The new law will enhance consumer protections and continue to lower costs for Michiganders by mandating rate reductions for eight years. Millions of divers will finally see relief under a new system that maintains the highest benefits in the country." 

The Coalition Protecting Auto No-Fault (CPAN) warned the reforms won’t live up to their billing. 

"All across Michigan, we are hearing reports of auto insurance companies jacking up premiums at renewal, so they can keep their profits high when they are forced to offer savings on Personal Injury Protection insurance next summer," said CPAN President John Cornack. "The auto insurance industry-controlled MCCA is looking for a public relations win by reducing your assessment while increasing your bill in other areas, and they still refuse to make their rate-making data public. It's all a shell game, one the auto insurance companies will continue to win until Michigan gets serious about increasing oversight and requiring transparency."

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