MCCA Assessment Increase Is Outrageous, Oversight Needed

Over the past year, I have posted several times about the Michigan Catastrophic Claims Association (MCCA) and its dubious assertions that it needs more money to stay afloat. This summer, Michigan motorists will see a 21% increase in the amount of this annual assessment, for a total of $175 per insured vehicle. This unjustified money grab is an affront to consumers, who are being denied important information about the assessment process.

The MCCA was created by the Michigan Legislature to help defray the costs of serious injuries suffered in motor vehicle collisions. Under Michigan’s No Fault auto insurance scheme, a person injured in an auto accident is entitled to unlimited lifetime benefits for care, rehabilitation, and treatment related to injuries stemming from the accident. In exchange for this benefit, insurance companies are protected against lawsuits for non-economic damages unless the injury reaches a certain “threshold.” This has been the law in Michigan for 40 years.

Advocates for the auto insurance industry insist that the MCCA is in jeopardy of going broke. Incredibly, the MCCA is unwilling to disclose the data to substantiate this claim, asking instead for lawmakers and consumers to simply trust the auto insurance companies. In November of 2011, when pressed for details about the MCCA’s financial picture, Insurance Commissioner Kevin Clinton told the public there is no point in releasing the information because it would be too complicated for anyone but the insurance industry to understand.

This increased assessment means that more money is being taken out of your pocket to protect auto insurance companies. The MCCA is unwilling to show you why it needs the money, at least in part because it doesn’t think you would understand anyway. Consumer oversight and transparency is needed immediately to rein in this behavior. The insurance industry must be held accountable for gratuitous and unwarranted premium increases. If you agree, contact your State Representative and State Senator today.