The fee Michigan motorists must pay as part of the state’s no-fault auto insurance plan will rise $10 per vehicle, to $170, on July 1, the Michigan Catastrophic Claims Association said Monday.
It's the latest in a series of extra costs to hit motorists this year. Effective Jan. 1, vehicle registration fees increased 20% and the state gas tax went up 7.3 cents per gallon, as part of a $1.2-billion road funding deal.
"It's a lot of money," said 80-year-old Gertrude Dhans of Allen Park, who lives on a Social Security check of $942 a month.
"It's ridiculous -- I don't even drive the car that far," said Dhans, who drove a catering truck for 30 years and still has a chauffeur's license and a good driving record.
The 6.3% increase in the per-vehicle assessment insurance companies pay to the MCCA — which is passed on to motorists — is because of an increase in the estimated cost to pay existing Personal Injury Protection benefit claims covered under Michigan's no-fault insurance system, the association said in a news release.
Michigan's system is unique in that it provides for unlimited, lifetime medical auto insurance benefits for catastrophic claims, and the fee covers benefits that exceed $550,000 per claim, the MCCA said.
The association said of the $170 fee, $143.33 will go to pay anticipated new claims, $26.27 to address a $1.9 billion estimated deficit related to claims, and 40 cents will cover administrative expenses.
The MCCA said it paid out $1.1 billion — more than $154 per insured car— in 2016 for claim costs resulting from catastrophic injuries.
The Coalition Protecting Auto No-Fault has waged a lengthy legal battle against the MCCA over access to the methods and calculations the MCCA uses to set its annual fee.
In August, the Michigan Court of Appeals ruled that the MCCA is not subject to Michigan's Freedom of Information Act.
The MCCA, whose board is dominated by insurance companies, says it releases adequate information about the rate-setting process.