ATTENTION: Michigan Automobile Owners!

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Effective July 1, 2019

Michigan is the only state that has “Unlimited Medical Coverage/Benefits”.  This is the Cadillac of coverage in the event you suffer severe physical injuries in an automobile accident.  In other states, like Indiana for example, a maximum payout limit is selected, typically ranging from $5000 to $25,000, and as high as $100,000. 

However, with a Michigan policy, if you are injured in an auto related accident and you incur $5 million in medical expenses, your policy will pay!  As you can imagine, the fact that it is unlimited coverage creates a big expense challenge when managing the claims that are paid. 

So, at this point you are probably asking, “How does the state of Michigan afford offering such extensive coverage?” This additional cost is added into your insurance policy premium, but is technically not allocated from your insurance carrier.  The easiest way to understand this is to consider your contribution to this state wide coverage pool as an added STATE TAX.

Specifically, if you look on your auto policy you will see a line item called MCCA which stands for the Michigan Catastrophic Claims Association.  The annual fee amount is set by the state of Michigan.  Your insurance company is required to forward this fee or “tax” to the state association pool so they can pay out medical claims. 

So, are you going to experience a rate increase July 1, 2019?  Technically… Yes. However, this is a state wide increase that will affect every auto policy, offered by every insurance carrier and provided to you from every agent. 

This increase is NOT the result of your insurance company or agency raising their rates!  So, switching to another carrier or agency will not solve the problem. 

This increase will take effect at your renewal.  You will not be charged in the middle of your policy term. 

If you have any questions on this fee, please don’t hesitate to reach out to us.  We are happy to help!


John Scott Insurance Agency

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