Michigan Drivers To Receive a Refund. How much will it be?

At Governor Gretchen Whitmer's behest, the Michigan Catastrophic Claims Association (MCCA) voted to issue insurance refunds from a $5 billion surplus amassed in 2021. Each Michigan drivers refund could be higher than $650 if the entire surplus is used, though the MCCA has said it reserve some funds for claims fulfillment.

Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati.com. ...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Jan 5, 2022

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Things to Remember

  • Michigan to issue refunds to owners of all qualifying vehicles
  • Refunds could amount to as much as $676 per vehicle
  • The money should be going to healthcare costs, some say

In a unanimous vote, the board of the Michigan Catastrophic Claims Association (MCCA) agreed to issue insurance refunds to Michigan drivers from a $5 billion surplus amassed this year.

It is a continuation of sweeping changes within the auto insurance laws present in Michigan, which has some of the highest rates in the country due to a no-fault system and special funds that pay out damages to people injured catastrophically in car accidents.

Refunds Could Equal $676 per Vehicle

Although the MCCA didn’t announce any details of the planned refunds — saying specifics would be available in the coming weeks — MLive.com, a Michigan-based news organization, calculated the maximum possible refund for Michigan drivers.

MLive.com writes on its website, “…if $5 billion in refunds were issued to drivers, it would equate to roughly $676 per vehicle.”

The spur to give the $5 billion surplus back to policyholders came from Michigan governor Gretchen Whitmer who publicly requested the MCCA give back the surplus as refunds. She said the news of the MCCA refunds is “great news.”

“Michiganders have paid into the catastrophic care fund for decades, and these funds from the $5 billion surplus belong in the pockets of Michigan policyholders,” she was quoted as saying in an MLive.com article.

While some are not counting on the money until it’s in their pockets, some are already thinking of ways to spend it.

“Any time you get money back, it’s always good,” Charles Homolka, a Michigan driver, told WTOL 11. “There’s always something to use it for. Either paying bills or buying groceries. Everything is going up. You know how that is.”

Decision Proves Controversial for Some

While Whitmer has said that the surplus is a result of overpayments, Anita Fox, Director of the Michigan Department of Insurance and Financial Services, told 7 Action News that the surplus is also due to “investment returns and cuts.”

A possible source of the surplus was a scale-back of a law that caused a 45% cut in care to people who suffered catastrophic injuries in car accidents but didn’t have Medicare.

While this catastrophic expense fund might have been a reason why auto insurance rates were so high in Michigan, the scale-back has left some families without aid during times they crucially need it.

“That money that she is giving away to all drivers is supposed to be paying for April’s care and everybody’s care,” Gabriel Mongefranco of Ann Arbor told 7 Action News.

Mongefranco’s wife April was involved in a car accident that left her with a spinal injury and needing 24-hour care. Because of the 45% cut, they have been forced to use retirement funds to pay for care. The possibility of putting April in a Medicaid clinic looms.

Putting her in a clinic separates April from her kids, which is a situation she doesn’t want to fathom.

“It is like you lose purpose of what you are supposed to do,” she said.

Wayne Miller, an attorney who fights for car crash victims in Michigan courts, says people view the refunds as “found money” and don’t realize what is at stake, namely that this surplus comes from cuts that deprive people of full health care coverage.

Currently, there are around 8,000 individuals affected by the 45% cut in care, and Fox is representing them in negotiations with insurance companies to find suitable health insurance plans.