LANSING, Mich. (FOX 2) – Michigan auto insurance companies hit their deadline to issue $400 reimbursement checks this week. However, that may not be the end of the money drivers might receive.
According to Anita Fox, the director of the agency that oversaw the distribution of $3 billion in refunds, her team will continue to audit funds held by the Michigan Catastrophic Claims Association over the summer. If the amount of money held exceeds what is needed to cover expected costs, the Department of Insurance and Financial Services may order another refund.
“It’s not impossible that there will be additional savings, but it’s an extraordinary amount of money saved as a direct result of the reforms,” Fox said.
The most recent refund given to drivers was due to the MCCA’s billion-dollar excess that they reported in 2021. Any additional refund amount that DIFS may order likely won’t be as large as the $400 that has returned to drivers last spring.
Although the deadline has passed, Fox said her agency’s work is not complete and that she will follow up with drivers and insurance companies to ensure that all available reimbursements are made to the respective drivers.
It’s the latest step in what she described as an “extraordinary” effort by the department overseeing a massive transfer of funds to millions of drivers. Fox said the state has issued a refund in the past, but not at this year’s level.
“It was a big boost in getting individual checks and e-transfers to millions of drivers,” she said. “There had to be strict controls, so the right amount of money was refunded.”
This includes implementing more cost controls in insurers’ plans, reconciling the amount owed by each auto insurer, the number of drivers, and implementing a deadline that allowed residents to get money in a timely manner while giving businesses ample time to issue refunds.
The department also had to find the best way to prevent drivers from getting ripped off.
“Whenever money changes hands, there will be those who try to take advantage of it,” Fox said. “We learned anecdotally from the Attorney General’s office early on that people were getting unsolicited calls, so we told consumers ‘don’t give out personal information over the phone or at the door’.”
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Anyone who has left questions about their reimbursements or still hasn’t received a check but was eligible will need to contact their insurance company first. If problems persist, drivers are advised to call the DIFS hotline at 833 ASK DIFS (833-275-3437) MF from 8 a.m. to 5 p.m.
Michigan remains the only state to offer the option of unlimited benefits for those catastrophically injured in an accident. Prior to 2019 reforms negotiated between Governor Gretchen Whitmer and the Republican-led Legislature, Michigan drivers had to choose an insurance plan that offered unlimited injury coverage.
The reforms, which removed this requirement, led to lower premiums. This also led to the MCCA’s $5 billion surplus.
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The MCCA fund that looks after people who have been catastrophically injured in crashes ended up with a higher surplus because of these reforms, Fox said. As a result, he overestimated the amount he would need to cover potential long-term care claims. The trust has about $24 billion in total.
As a result, last November the group was asked to repay as much excess as possible while keeping enough money to cover claims, plus a small extra cushion just in case.
When the DIFS audits the group, it will look to see if the MCCA exceeds 120% of the expected claim liabilities.