Flint, MI— Roughly 70,000 refund checks may be headed to Flint residents from the Michigan Catastrophic Claims Association, but their amount, timing, and necessity remain in question.

The refunds are the result of a letter from Governor Whitmer demanding that the MCCA—a private nonprofit that reimburses no-fault insurance companies for certain Personal Injury Protection claims—use its self-reported $5 billion surplus to refund the state’s auto insurance policy holders earlier than its 2022 requirement.

“Many Michiganders have experienced financial hardships during the ongoing COVID-19 pandemic,” the letter reads. “Now is not the time for the MCCA to withhold money owed to Michiganders.”

While the association did not need to comply, it did agree to issue refunds early.

“The goal is to issue the largest possible refunds to consumers while maintaining sufficient funds to ensure high-quality care to those who have been catastrophically injured,” read the association’s statement, released Nov. 3. “Details on the specific refund amount per vehicle, along with a proposed timeline and logistics, will be announced in the next several weeks.”

The MCCA did not respond to Flint Beat’s request for further details on when or how much auto-insurance policyholders should expect.

While data on the number of auto-insurance policy holders in Flint is not kept by the Secretary of State, its records confirmed a little over 70,000 vehicle registrations fall within the zip codes of 48502 to 48507, 48531, 48550, and 46553—zip codes that roughly correspond to Flint’s borders.

When registering a vehicle in Michigan, it is required that an owner have no-fault insurance coverage, so registration totals offer an estimate for the number of MCCA refund checks potentially coming to the city.

“But just because a car doesn’t have insurance, doesn’t mean it has to. (For example, if it’s in storage),” cautioned Tracy Wimmer, director of communications for the SOS, in an email.

While the number of Flint residents who may benefit from MCCA refunds is difficult to determine, the conversation around the who is harmed by those refunds may be more so.

Part of the MCCA’s $5 billion surplus comes from 2019 legislation that has been criticized for effectively limiting payments on long term care for crash victims—one of the MCCA’s main purposes and a source of deep upset for many Michigan families and crash survivors.

Some insurance providers believe giving refunds early may equate to the MCCA’s annual assessment fee, which policyholders pay via their providers, going up later to re-bolster its reserves.

“This happened in 1998,” said Jeremy MacDonald, one of the owners of Mid-Michigan Agency and board member for the Professional Insurance Agents of Michigan. “Everybody got $182 back per car. In 2002, due to a reserve shortage from the refund, (the assessment fee) started to increase, from $71 in 2002 to $100 in 2003, and ultimately reaching $200 per vehicle in 2019.”

The MCCA’s current assessment fee is $86 per vehicle. MacDonald said it may lessen before it increases in response to this round of refunds, but he expects it will go up again.

“The problem is you don’t know how old somebody is going to be when they’re injured or how badly they’ll be injured,” he said of the reimbursements the MCCA is responsible for. “So anything they claim to be a surplus is just a guess.”

That guess, and paying out on it early, means that the association may end up under-reserved again. That would be a problem policyholders may pay the price for, said MacDonald, who questioned the governor’s motive for sending a letter to the MCCA in the first place.

“It’s more of a political chess than anything,” he said. “The MCCA already had a scheduled audit for return of funds if over-reserved, with our without input from the governor.”

In her Nov. 1 letter, Whitmer said the refunds were a way to support families during tough times.

“As we stay laser-focused on growing our economy and ushering in a new era of prosperity,
we need to use every resource we have to help people thrive,” she said.

Kate Stockrahm

Kate is Flint Beat's business and nonprofit reporter. She joins the team as a corps member of Report for America, a national service program that places journalists into local newsrooms to report on under-covered...

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3 Comments

  1. Hi this is to be requested the help of KT the reporter on the event of the bikes on the bricks, I’m the girlfriend of the biker stumpy you took pictures of the evening of the bikes on the bricks and you interview him about his life style of being a biker..we were wondering if it is all possible to get a hard copy of the interview and all the pictures you took of him and us that evening.. this is the second time I have try to attempt to get a response from you on this..we wouldmbe gladly.pay for any copies, photos or CD of the photos and interview…he was the talk of the club from his others brothers and sisters, it would be of honor.if we could get ahold of the CD and article you wrote about him.. plz give us a call to let us know either way if we can have access to it..we can come there and meet you if you would like us too..Thank you for all you have reported about him..here is my cell number.231-287-8332, plz call me back really appreciate it..Stumpy

  2. Is this just for Flint residents? I know their premiums are higher but we were paying close to a $1000 per month when we had teen drivers. Just curious. I don’t mean any disrespect to Flint residents.

  3. The refund should reflect the number of years each vehicle had to pay the fee, since 2019 (inclusive). So, at the current rate of $86.00, the refund should be $258 per vehicle. If you do the math and divide the 5 billion in surplus by the number of insured vehicles, I believe the $258 would be lower than the end number. This would be fair to all involved and still leave a small surplus.

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