Now, drivers in Michigan will have to pay more in order to cover the medical costs due to the accident-related injuries in the state. Each vehicle will have to shell out an extra $145 starting July 1. This increase in fee ($1.91-per-vehicle increase) over the fees this year has been announced by the Michigan Catastrophic Claims Association (MCCA) on Friday. This fee is included in all auto insurance policies to pay for all the medical expenses that go over $500,000 for vehicle-related injuries that are more severe in nature like permanent paralysis or closed head injuries.
Although the MCCA has predicted a 29% decline in the catastrophic injuries by next year, this 2%hike in rates only reflects the rising costs with regard to medical care, stated Pete Kuhnmuench, executive director, Insurance Institute of Michigan.However, there is some serious lobbying that is going on in the group in order to limit the amount of money that the insurers must cough up by way of medical costs for accident victims and also letting motorists choose the least expensive medical cover.
Michigan is the only state where the drivers are required to have unlimited cover for auto-related injuries. Around $897 million was paid by the MCCA for catastrophic injuries in the year 2010. Around $74 billion has been paid out on 25,900 claims since 1979 when the fund began. There has been the slightest change in the new MCCA fee since 1998 to 2000. During 1998, out of the surplus amount of $2.5 billion that was held by the MCCA, $1.2 billion was refunded to motorists due to the immensepressure from the legislature and the Gov. John Engler in order to reduce the surplus.
Gary Mitchell, spokesman for Michigan Association of Insurance Agents was quoted as saying that while Michigan’s auto insurance costs were among the highest in the nation when compared to any other state, it was a fair deal if someone was seriously injured in a motor vehicle accident. He also observed that during 1992 to 1994, the voters in Michigan had rejected ballot issues to get rid of the mandatory unlimited medical cover.
Mitchell also stated that this was not an issue that would have the general public storming the Capitol in protest. The MCCA fee had gone up and down on quite a few occasions but had peaked during last year to $143.09.
