Driver refunds prove reforms are working

Gov. Gretchen Whitmer recently advocated for giving Michigan drivers refunds from a $5 billion surplus held by the Michigan Catastrophic Claims Association, and it appears this will happen. The refund is welcome news, and an indication that auto insurance reforms are working.

Residents are reaping the benefit of 2019 bipartisan reforms to the state’s notorious no-fault insurance requirements that have lowered the price of insurance premiums and medical costs associated with auto accidents. For too long, Michigan drivers paid the highest insurance rates in the country — and not by a little. This made coverage unaffordable for many motorists, especially in Detroit.

“It is great news that the Michigan Catastrophic Claims Association has swiftly taken action in response to my letter this week to begin the process of issuing refund checks to help drive down the costs and produce savings for Michiganders with auto insurance,” Whitmer said last week.

The law already stipulates that refunds were possible following an audit in 2022, so Whitmer appears to be jumping the gun a little, and she’s gotten some criticism for that. But the bottom line is that drivers are saving money, and that’s worth celebrating. The amount of the checks is still unknown.

“Delivering real savings like this to Michigan drivers is the entire reason we fixed the state’s broken auto insurance system in 2019,” said House Speaker Jason Wentworth, R-Levering, in a statement. “We wrote this law to include an automatic refund next year, and I’m glad our reforms have produced large enough savings for the MCCA to act immediately and return that money to the people even sooner.”

The Michigan Catastrophic Claims Association, a state-created nonprofit that reimburses insurers for claims above a certain threshold, should still ensure refunds are based on a financially sound analysis. The MCCA receives its funding directly from drivers via annual assessments.

Sen. Lana Theis, R-Brighton, chairwoman of the Insurance and Banking Committee, says the law as written would have likely triggered refunds around the time Whitmer called for them. She also cautions against the governor or Legislature interfering with the MCCA’s decision-making process.

“I believe it would have taken place exactly when it did, regardless of the governor’s request,” Theis says.

Whitmer may have pushed for the refunds to deflect some of the blame she’s gotten recently from survivors of catastrophic accidents, who want to modify the reforms to reclaim former benefits. The law caps reimbursements to medical providers, and has led to changes in the care for these individuals.

While lawmakers may want to revisit that aspect of the law, they should hold firm on most reimbursement caps as well as giving motorists a choice in what kind of personal injury protection coverage they want. It’s these changes that have driven most of the savings.

Michiganians deserve this refund, and we’re glad to see some additional proof that the reforms are indeed lowering the burden of driving in this state.


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