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No-Fault Explained: Michigan Catastrophic Claims Association

The No-Fault Auto Insurance Act creates a Michigan Catastrophic Claims Association that pays injured motorists’ bills in the most serious of auto accidents. But what is the MCCA and how does it work?

In 1978, the Michigan legislature added MCL 500.3104, which created the Michigan Catastrophic Claims Association (MCCA). This unincorporated, non-profit entity is made up of all the licensed auto insurance providers in the state. It has one job: to cover catastrophic medical expenses from car crashes in Michigan.

Here’s how it works.

The MCCA collects a fee from every insured driver in Michigan, paid through their auto insurance policies. The fee is calculated based on the number of vehicles each provider covers. In 2015, the Michigan Catastrophic Claims Assessment was $150.00 per vehicle.

All that money pools together in the care of the Michigan Catastrophic Claims Association. Then, when a motorist is seriously injured in an auto accident, her insurance company can look to the MCCA for help paying for her medical expenses.

The MCCA only applies in the most serious of auto accidents. The amount at which an auto insurance provider is allowed to turn to the MCCA for help goes up a little every year. In 2015, the amount is $545,000. If more than one person is injured in an accident, each one needs to reach that amount before his claim can be submitted to the MCCA.

Is the MCCA Legal?

Michigan motorists may wonder whether it is legal for a non-profit organization to tack on fees to their private no-fault auto insurance. In 1987, a Michigan Court of Appeals ruled that the MCCA did not violate the state constitution. It also determined the MCCA to be a state agency, subject to state regulation.

How Do We Know How Much We Have to Pay?

One of the biggest questions around the Michigan Catastrophic Claims Association is how it calculates its fees. Right now, the MCCA refuses to release information on how that fee is calculate. Advocates for Michigan motorists have filed lawsuits trying to get that information, but they are still going through the appeals process.

In the meantime, motorists can go to the MCCA website to find out how much their assessment will be each year.

How Do I File a Claim with the MCCA?

Even if you have been in a very serious auto accident, you will never have to deal with the Michigan Catastrophic Claims Association directly. Instead, your PIP insurance provider will pay all your no-fault benefits, no matter how expensive. Then the insurance provider can file a claim to be reimbursed by the MCCA for any amount over that year’s minimum claim amount.

The MCCA acts behind the scenes to make sure the medical needs of catastrophically injured motorists are provided for. The auto accident team at Christensen Law is ready to answer all your questions about the MCCA, how it works, and whether your case will qualify for reimbursement under the law.