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Q

Is the MCCA charge in Michigan assessed for each vehicle or per policy? Hypothetical situation: A single driver drives 20,000 miles per year, he owns one vehicle and he is charged a MCCA fee which covers his liability for 20,00 miles of use. If he owns and registers 10 vehicles and drives them each 2,000 miles per year is the MCCA charge the same for the same 20,000 miles of driving?


A

The Michigan Catastrophic Claims Association (MCCA) assessment is per vehicle, not per policy. Mileage that one drives is not taken into account; the amount of vehicles you are insuring is - while one car or 10 cars may be driven the same amount of miles in a year the MCCA assessment is per vehicle. So in your hypothetical situation the person with 10 cars would be paying 10 assessment fees, typically as part of each vehicle's PIP coverage.

As you are likely aware Michigan is the only state that offers unlimited Personal Injury Protection (PIP) benefits. These benefits are offered through no-fault auto insurance policies. The Michigan Catastrophic Claims Association was created by the legislature as a means of spreading costs across all Michigan motorists for providing these unique unlimited benefits. The Michigan Catastrophic Claims Association reimburses no-fault auto insurers for benefits that exceed $460,000 (amount as of July 1, 2009).

The MCCA Board meets every spring to set the assessment for the year beginning July 1st. The assessment is set by analyzing the amount needed to cover the lifetime claims of all people catastrophically injured in a car accident. Investment return, medical cost inflation, and any changes to coverages will again be considered. The analysis yields an amount needed to pay those lifetime claims and a per vehicle assessment is set based on that amount.

The MCCA announced that the 2009 assessment will be $124.89. The pure premium (the actual cost for each vehicle in the state of Michigan to fund the MCCA pool) is $100.78 and the deficit adjustment is $23.89, with a $.22 administrative expense, setting the assessment at $124.89.

The MCCA was created by MI law but is a private, nonprofit association. All of its dealings are with insurance companies, not the general public. The MCCA has a Board of Directors that consists of 5 representatives from insurance companies, appointed by the Commissioner of the Office of Financial and Insurance Services (OFIS) according to Michigan statutes.

Although the MCCA assessment technically is made to the insurance company, companies typically pass the assessment on to policyholders. Some insurance companies include the MCCA assessment in the Personal Injury Protection (PIP) portion of your insurance premium. Other companies list this as a "statutory assessment" or "MCCA assessment" on the declarations page of your policy.

The amount assessed each insurer by the MCCA is the same but each insurance company may include administrative and other miscellaneous costs in the amount it assesses policyholders for this coverage. Therefore, the amount assessed by the MCCA may affect each policyholder's premium differently. If you have questions about the amount you are being assessed, you can contact your insurance agent or insurance company.

As we mentioned earlier the Michigan Catastrophic Claims Association increased its assessment to insurance companies by $20.31 to $124.89 per insured vehicle and this is effective July 1, 2009 to June 30, 2010.

For more information on the MCCA assessment, contact your insurance agent or even the Michigan insurance regulator which is Office of Financial and Insurance Regulation (OFIR) who can be phoned toll free at 877-999-6442.


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3 Responses to "Is the MCCA charge in Michigan assessed for each vehicle or per policy? Hypothetical situation: A single driver drives 20,000 miles per year, he owns one vehicle and he is charged a MCCA fee which covers his liability for 20,00 miles of use. If he owns and registers 10 vehicles and drives them each 2,000 miles per year is the MCCA charge the same for the same 20,000 miles of driving?"
  1. Visitor

    The MCCA assessment was raised to $175 per car in 2011.

      Reply»  
  2. Anonymous

    I want to know what kind of vehicles pays this added tax. Do you pay if you have a moped? Do pay if you have a scooter? Do you pay for a boat?

      Reply»  
  3. Anonymous

    the question was answered in detail. thank you

      Reply»