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Rep. Yaroch: MCCA fee increase proves need for car insurance reform
RELEASE|March 28, 2019

The Michigan Catastrophic Claims Association (MCCA) would be subject to greater transparency and drivers would have more choice in their car insurance policies under plans reintroduced by state Rep. Jeff Yaroch of Richmond.

Yaroch’s plan is even more urgent given the MCCA’s announcement this week it is again raising its annual fee related to the fund for catastrophically injured drivers in Michigan. The fee will increase to $220 per insured vehicle – up 15 percent – on July 1.

Yaroch’s House Bill 4210 would subject the MCCA to Freedom of Information requirements. It also would require the MCCA to publicly disclose on its website all data used in computing annual per-insured-vehicle assessments, expected losses and expenses.

“If we are going to reform auto insurance in Michigan we must take a hard look at the Michigan Catastrophic Claims Association,” Yaroch said. “We need more transparency and accountability within the MCCA – and we need it now. My proposal should be on the table if we’re serious about helping Michigan drivers, who are paying the highest average car insurance rates in the nation.”

The MCCA is a private, nonprofit entity which reimburses insurance companies for auto-related medical claims over $555,000. Michigan requires all car insurance companies to belong to the MCCA and pay an annual per-insured-vehicle assessment to fund the association. The fees are passed on to drivers.

“The MCCA jacks up its fees every year, and we have no way of knowing if these increases are justified,” Yaroch said. “We’ve got to find out what is happening with the money we have to pay to drive a car.”

Yaroch’s second measure, House Bill 4211, provides Michigan drivers with choice in the personal injury protection (PIP) medical coverage portions of their car insurance policies by creating a new coverage level.

Under Yaroch’s plan, drivers could continue choosing the current unlimited medical coverage, or choose a PIP coverage level of $555,000 – the amount at which the MCCA currently reimburses auto insurers for auto-related medical expenses. The $555,000 coverage level would increase when the MCCA fee is scheduled to increase to ensure health care coverage protections for drivers who choose that option.

“Michigan drivers should have a say in the amount of medical coverage they have on their car insurance policies,” Yaroch said. “By forcing every driver to buy unlimited medical coverage, there’s no structure in place to prevent car insurance premiums from skyrocketing. Creating a new coverage level provides long-overdue choice and will offer some financial relief to Michigan drivers.”

Both of these bills are reintroductions from last session and have been assigned to the House Insurance Committee for consideration.

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