The premium paid to the Michigan Catastrophic Claims Association (“MCCA”) by
member insurance companies will be $175.00 per insured vehicle effective July 1, 2012 to
June 30, 2013. This represents an increase of $30.00 (21%) over the current MCCA charge of
$145.00. The $175.00 assessment represents $141.93 to cover claims; $32.72 to address the
$2 billion estimated deficit and $.35 for administrative expenses. The current deficit is estimated
at $310.78 per insured car. The MCCA premium charge is determined each year at this time
following its annual actuarial evaluation.
Michigan PIP auto insurance law provides unlimited lifetime coverage for medical
expenses resulting from auto accidents and is the only state in the nation that mandates these
unlimited benefits. (The state with the next highest level of benefits mandates only $50,000).
Created by the state legislature in 1978, the MCCA is a private, non-profit association whose
mission is to protect the financial integrity of Michigan’s auto insurance industry by providing
reinsurance for these unlimited benefits. The MCCA reimburses auto insurance companies for
Personal Injury Protection (PIP) benefits paid in excess of $500,000 per claim.
All auto insurance companies operating in Michigan are required to be members and pay
premiums for the reinsurance provided by the MCCA. These premiums, together with the
insurer’s PIP premium, represent the cost to cover the mandatory unlimited medical benefits
which, like other costs and expenses, are reflected in the auto premiums all Michigan
Each year more individuals receive benefits resulting from catastrophic automobile accidents
and their claim costs are rising. Estimating the ultimate costs of these benefits requires
sophisticated analysis but the trend of increasing costs is a key driver of changes to the MCCA
The MCCA paid out $927 million (more than $133 per insured car) in 2011 for claim costs
resulting from catastrophic injuries. The majority of these catastrophic injuries involve closedhead injuries, paraplegia, quadriplegia and burns. Since 1979, there have been over 28,000
claims reported to the MCCA, which will cost an estimated $85 billion.
Additional information on the MCCA, including claim payment statistics, audit reports and
answers to frequently asked questions can be obtained from its public website: