The Michigan Catastrophic Claims Association Fee Jumps to $220 Per Car July 1st 2019

The association announced the fee on auto insurers will rise from $192 to $220 on July 1, a $28 increase that will ultimately be passed along to consumers in the form of higher rates.

Gov. Gretchen Whitmer on Wednesday ordered an accelerated state audit of the Michigan Catastrophic Claims Association after the private non-profit's board voted for a 15 percent increase in the annual auto insurance assessment.

State law requires auto insurance companies to pay the assessment to cover costs of lifetime medical benefits guaranteed under Michigan’s no-fault auto insurance law. 

The MCCA operates as a reinsurance program, reimbursing auto insurance companies for expensive medical claims for motorists who are catastrophically injured in auto accidents. The claim threshold is also set to rise from $550,000 to $580,000 this summer.

The pending increase in the fee — which has risen 76 percent since reaching $124.89 in 2009 — comes as Michigan lawmakers develop plans to reform the state’s no-fault auto insurance and rein in rates that already rank among the most expensive in the nation.

Drivers across the state are "feeling the pinch of paying the highest auto insurance rates in the nation and it’s time to do something about it," Whitmer said in a statement. “Michiganders deserve to know why they are being forced to shell out hundreds of dollars in additional fees for car insurance, which is why I’m ordering an audit to provide drivers with the transparency they deserve."


MCCA officials testified before a Senate committee earlier this month, disputing anti-transparency accusations while arguing that “waste and fraud” in the medical system is driving up insurance costs.

The association, created by the Michigan Legislature in 1978 but controlled by insurance companies, is sitting on $20.6 billion in assets but claims $23.5 billion in long-term liabilities. It is not subject to public records requests that could shed further light on its fee calculation process but publishes internal financial and independent auditor reports each year.

The annual fee is designed to cover current-year catastrophic claims but also gradually pay down a $2.9 billion deficit over 15 years, MCCA Executive Director Kevin Clinton told lawmakers.

In announcing the pending $28 fee increase on Wednesday, the MCCA said its costs are rising, in part, because more individuals are receiving benefits and medical care costs continue to rise. 

The association said it paid out $1.2 billion in 2018 for claims resulting from catastrophic injuries. The majority of claims involve brain and spinal cord injuries, multiple fractures, and back and neck injuries. Most of the payments were for attendant care, prescriptions and hospitalizations. 


The Michigan Department of Insurance and Financial Services, which Whitmer ordered to conduct a separate and accelerated audit, has the authority to examine MCCA documents and review its operations, a process that last occurred in 2015, according to the administration.  

“Today we told the MCCA that we were concerned and strongly urged them to provide more information so the public can understand the basis for this fee increase,” Insurance Director Anita Fox said in a statement welcoming the governor's request for a financial audit. 


Other long-discussed reform ideas include a fee schedule for medical providers that would cap the amount they are allowed to charge insurers for patients injured in auto accidents. Ronald Dwyer of Roninsureme.com, has been one such voice for better fee scheduling.  "I have been stating for years that we need to put medical fee scheduling in place similar to that of Medicare/Medicaid.", Said Ronald Dwyer.  "Right now their is no true cap only the term 'Reasonable Costs' ."

Dwyer also stated the following "Michigan is not the only state in the union with no-fault, we are though the only state with unlimited benefits.  We don't not want to get rid of our unlimited benefits or our no-fault coverage - which is to prevent you from having to go to court  to sue the other driver to get medical reimbursements.  Two main factors have driven the cost of insurance; 1) No True Fee Scheduling for medical coverages/benefits 2) Our legislature in the mid 1990's opened up Pandora's box by easing restrictions on lawsuits pertaining to auto accidents through legislation. This has caused a rise on insurance claims that are most of the time frivolous which in turn have raised insurance premiums to record levels. If we fix these two issues we can keep our unlimited benefits and keep our insurance premiums more affordable."

Michigan’s Republican-led Senate and House are developing proposals that are expected to provide motorists with the “choice” to purchase auto insurance policies with reduced medical coverage. Dwyer believes this is a very bad idea, "What will happen is your will have to pools of coverage and everyone will want to make the wrong choice by taking the reduced coverage. This will leave the other pool with few participants which will then make the unlimited coverage to expensive and it will collapse. It will be a back door way of reducing coverage for all with no guarantee about lowing premiums for a long period of time. " 

Supporters of Michigan’s no-fault auto insurance system contend that eliminating the state’s guarantee of lifetime medical benefits would end an important safety net for some injured motorists and ultimately force more residents into bankruptcy and on to government health coverage.

Legislators have tried for years to reform the state's auto insurance laws, but efforts have repeatedly stalled amid intense lobbying from hospitals, the insurance industry and trial lawyers. 

Spring means hail, and costly hail damage

Flooding, tornadoes, hurricanes and wildfires often steal the spotlight but beware of underestimating the fury of a hailstorm.

Reports of Golf Ball Sized Hail in Houghton Lake MI - 

video from Kevin Blazo Houghton Lake Resident 

August 2nd 2015

Hail causes about $1 billion in damage to crops and property each year, according to the National Oceanic Atmospheric Administration (NOAA). And although hailstorms are rarely associated with fatalities, they are responsible for serious injuries and severe property and automobile damage.

Here is some advice on how to prepare for potential hail storms:

Before a Hailstorm

• Check your policy to see what’s covered and the deductible you’ve chosen.
• Your insurance policy typically covers the cost to repair roofs and cars and other common hail damage.
• You may have a higher deductible for wind and hail damage than you do for other types of claims.
• Talk to your local independent agent to find out more.
• Repair or replace worn, curled or missing shingles.
• If your roof is aging, consider replacing it before hail season begins.

During a hailstorm

• Stay indoors.
• Stay away from skylights and glass doors to avoid broken glass.
• If it is safe, close drapes, blinds or shades to prevent debris from blowing inside.
• If possible, park vehicles in a garage or other covered area.

“Hail comes without much warning,” said 27 year insurance veteran Ronald Dwyer of Roninsureme.com, “and can cause significant damage to property.”

Family Day Care Liability Insurance - Are you Covered?

 Why Do I Need Liability Insurance?

While most providers never need to file a claim, daycare liability insurance is a wise investment. As careful as you are with the children in your care, accidents can happen. If a child in your care is injured or there is an allegation of abuse or sexual misconduct, you can be sued. Even if you win the case, litigation could cost you a great deal of money for legal fees. Childcare liability insurance gives you peace of mind.

Doesn't My Homeowner Policy Cover My Day Care Business?

Most homeowner policies exclude coverage of family day care. In fact, some insurance companies will not insure a home at all where a child day care business is run. You can check with your insurance carrier to find out if you are covered. Be aware that if your insurance carrier will not cover a day care home, you may end up having to seek coverage elsewhere. However, it is better to have proper coverage than to avoid the issue.

If you are not covered by your homeowner policy, you can seek separate family day care liability insurance coverage. This would be an insurance policy that is separate from your homeowner policy. There are several companies that offer coverage. Some companies offer coverage to providers across the nation, while others are more localized.

Shopping for Liability Insurance
The rates for liability insurance vary greatly from one area to the next. When shopping for family day care liability insurance, look at the amount of coverage you are purchasing, as well as what is covered by the policy. The basics should be covered: bodily injury, property damage, accidents, medical payments, and personal injury.

Additionally, you should look for coverage that includes a provision for sexual abuse. False accusations or misinterpretation can result in the need for such protection. Such issues as libel, slander and alienation of the affection of a child toward his/her parents should also be covered.

Look for a policy that covers claims on an occurrence basis. This means that claims that occur during the policy period will be covered, regardless of whether they are reported after the policy expires.

What is Not Covered by Liability Insurance?

You must look at your individual policy for the "Exclusions" section to find out exactly what is being excluded from coverage. Most companies will not cover claims resulting from: transporting children in a motor vehicle, swimming pools, certain breeds of dogs, admitted sexual misconduct, willfully hurting a child or failing to follow state licensing regulations.

Ronald Dwyer is an independent insurance agent licensed in Michigan for Home - Auto – Business Insurance. He can be reached at rondwyer@roninsureme.com or 248-390-6345. His website address is www.roninsureme.com , Linkedin address is www.linkedin.com/in/ronalddwyer and Facebook address is www.facebook.com/dwyerinsurance