Michigan Auto Insurance Fee for Serious Injuries to Rise

Michigan motorists will pay $20.31 more this year to a fund helping support seriously injured accident victims.

The Michigan Catastrophic Claims Association this week raised the annual assessment to $124.89 per vehicle.

The assessment is passed on from insurance companies to drivers’ annual insurance bills.

The MCCA reduced the charge by about $18 to $104.58 last year after getting more from investments than expected and seeing medical costs not rise as fast as projected.

But the fee will rise starting July 1 until June 30, 2010.

The MCCA said investment returns fell in the last year while claim costs continued to rise.

Michigan is the only state to offer unlimited lifetime medical benefits for people seriously injured in car accidents.

In February, Gov. Jennifer Granholm asked the MCCA to not increase the annual assessment.

The MCCA is a private, nonprofit association created by state law in 1978. All insurance companies that write auto insurance in Michigan have to be members.

The MCCA reimburses no-fault auto insurers for personal injury protection claims that exceed $460,000. The MCCA estimates more than 1,050 motorists will be catastrophically injured in accidents this year.

Of the $124.89 annual fee, about $100 will cover claims. About $24 will help address a $2.2 billion deficit in the fund.

A Democratic-controlled state House committee last week passed legislation designed to open up the MCCA to more public scrutiny, with Republicans opposing the bills.

The measures would require an annual audit of the MCCA, add public members to the MCCA board and require the MCCA to comply with the Open Meetings Act and Freedom of Information Act.

Critics say the association has almost unlimited ability to tax Michigan drivers through the assessment. The insurance industry says the legislation would lead to unwarranted interference in the operation of a private organization.