Dave Lucas, CIC
By Chris Christoff, The Detroit Free Press
Starting July 1, Michigan motorists will pay more than ever — $145 per vehicle – to cover the state’s cost of treating severe accident injuries.
That represents a $1.91-per-vehicle increase over this year’s state-mandated fee, announced today by the Michigan Catastrophic Claims Association (MCCA).
The fee is tacked onto all vehicle insurance policies and is set each year by the MCCA. The association of insurance industry representatives pays medical costs that exceed $500,000 for auto-related injuries, such as permanent paralysis and close-head injuries.
The MCCA fee has fluctuated since it began in 1979. It is based on predictions of future costs of current and new severe injury claims.
Next year, it’s predicted that 850 insured Michiganders will be catastrophically injured.
That’s down from the 1,200 severe injuries that were predicted in the past year – a 29% decrease.
Yet the MCCA fee will rise about 2%. That illustrates the soaring cost of medical care, said Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, which represents major insurance companies.
The institute is lobbying for changes in state insurance laws to place caps on medical procedures – similar to workers compensation medical limits – and to allow drivers to choose less expensive medical coverage.
Michigan is the only state that requires all drivers to have unlimited medical coverage for injuries suffered in auto accidents. The MCCA said it paid out $897 million in 2010 for catastrophic injuries.
The fee also is supposed to reflect the cost of medical care and expected returns on investments.
Since 1979, nearly 26,000 claims have been covered by the MCCA, according to the association.
The new MCCA fee represents the smallest change since 1998-2000, when it was held to $5.60 for all three years. In 1998, with a $2.5-billion surplus, the MCCA refunded $1.2 billion to motorists, under pressure from the Legislature and then-Gov. John Engler to reduce the surplus.
Since 2000, the MCCA fee has gone up and down, peaking last year at $143.09 – until this year.
More information on the MCCA’s claim statistics, audit reports and questions can be obtained at www.michigancatastrophic.com.