Nearly all motorists living in Michigan have $400 coming their way in the second quarter of 2022. The total of $3 billion in refunds comes from a surplus in the Michigan Catastrophic Claims Association Fund.
The Michigan Catastrophic Claims Association Fund is a nonprofit corporation that exists to pay for catastrophic care for injured motorists. It has over $27 billion in assets. The funding comes from surcharges that are part of all of the policies for insured vehicles in Michigan.
“Michiganders have paid into the catastrophic care fund for decades, and I am pleased that the MCCA developed this plan so quickly after unanimously approving my request to return surplus funds to the pockets of Michiganders," Governor Gretchen Whitmer said, according to The Detroit Free Press.
To receive the money, a person only needs to have an insured vehicle in Michigan as of October 31, 2021. People who have "historical vehicle" plates get $80, rather than the $400 other folks receive.
The Michigan Catastrophic Claims Association Fund will turn this money over to the insurance companies operating in the state, and these businesses will be responsible for distributing the checks. An eligible vehicle owner doesn't have to do anything to request the funds.
According to The Detroit Free Press, Republicans are accusing Governor Whitmer of using this refund as a political tool. She is likely to campaign for re-election next year, and this money goes to voters a few months before they cast their ballots.
Michigan has more complex auto insurance laws than many other states. The no-fault laws there don't let drivers make claims against other drivers’ insurance companies in the case of an accident.
Research from the National Association of Insurance Commissioners indicates the average car insurance rate for Michigan in 2018 was $1,470 per year. This makes it the fourth most expensive state for a policy in the country. The national average for an auto insurance policy in 2018 was $1,057.