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Vehicle fees set to increase under Michigan's no-fault insurance law

6:02 PM, Mar 27, 2013   |    comments
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LANSING, Mich. (Detroit Free Press) - The annual fee that Michigan vehicles are charged under the state's no fault auto insurance system will increase 6% on July 1, to $186 from $175, the Michigan Catastrophic Claims Association announced today.

The 6% hike for 2013-14 follows a 21% hike in 2012-13.

Auto insurance companies operating in Michigan are required to pay the annual assessment to cover the cost of Personal Injury Protection benefits guaranteed under Michigan's no-fault law. The cost is passed on to motorists when they buy insurance.

In a news release, the MCCA said the $186 fee represents $156.44 to cover anticipated new claims, $29.19 to address an estimated $2 billion deficit in the fund related to existing claims, and 37 cents for administrative expenses.

The Coalition Protecting Auto No-Fault, which is suing the MCCA seeking detailed information about how it calculates the assessment, criticized the announcement in a news release.

"Here we are again, hit with a secretive rate increase that consumers can do nothing about," said CPAN president John Cornack.

"This fund is controlled entirely by insurance companies, its meetings are closed to the public and its rate-setting information is completely closed off from public scrutiny..."

The MCCA helps reimburse insurers for costs above $500,000 for the care and treatment of seriously injured auto accident survivors. Medical benefits can be unlimited under the Michigan law.

By Paul Egan, Detroit Free Press Lansing bureau

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