Up or down, which is it? – Al Bourdeau Insurance Agency

I’m sure you have seen that the MCCA Fee in Michigan increased yesterday. The fee increased about $28 per vehicle, per year, making the new MCCA Fee $220 for July 1st, 2019 through July 1st, 2020.

“But I thought they just passed a law to reduce auto insurance premiums!?”

It is a question and concern many Michiganders share right now. It can be legitimately confusing.

So what is going on?

MCCA (Michigan Catastrophic Claims Association) fee is a per vehicle fee that is assessed to every motor vehicle insured in Michigan to help cover the costs of the unlimited, lifetime medical coverage we all have known as Personal Injury Protection. We all pay it per vehicle. Auto insurance companies are responsible for roughly the first $550,000 of all Personal Injury Protection claims. After their responsibility is met, the remainder of the claim is then handled by the MCCA. The MCCA will also pay for Personal Injury Protection claims for those injured in an auto related accident that do not have Personal Injury Protection benefits of their own, for example, a pedestrian who does not own a vehicle and does not carry auto insurance who is struck by an automobile. It also currently covers motorcyclists who are involved in an accident with a motor vehicle.

The fee is revised annually by the MCCA to keep up with the cost of current claims and the cost of predicted future claims for the coming year. This change in the fee happens every July 1^st. The fee change that went into effect yesterday will be the new fee until July 1^st of 2020.

This brings us to no-fault reform, the bill that was recently passed aimed at reducing auto insurance rates in MI. Among the numerous changes in that bill are more options for Personal Injury Protection coverage levels other than just unlimited.

This bill will also impact how the MCCA assesses that fee and in some cases, depending on which of the new coverage levels you select for Personal Injury Protection, you will see a reduced MCCA fee or potentially no MCCA fee for some of the lower coverage options.

While the changes that are coming with no-fault reform are not going into effect until July 1^st 2020, the MCCA will still have to continue to handle these claims on an unlimited basis until then, thus the revised fee that went into effect yesterday.

For years there has been much debate about how the MCCA assess these fees for Michigan motorists and that concern drove some of the changes we will see with no-fault reform which includes much stricter financial oversight and reporting of the MCCA to the State of Michigan.

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Darin Mohrman

Sales and Operations Manager, Personal Insurance at Al Bourdeau Insurance Agency

“Education is what you get from reading the fine print; experience is what you get from not reading it.“

I’m a former aspiring “ski-bum” turned insurance professional.I was licensed in 2002 and in 2013 I obtained my Certified Insurance Counselor (C.I.C.) designation. I'm married to an amazing woman, have a wonderful son and a cat.I enjoy travelling, music, craft beer, woodworking, collecting and restoring antique tools and all things computer and tech related.