Other Premium Charges
Automobile insurers in Michigan are required to participate in and fund certain organizations
that support our no-fault system. Like other insurer
expenses, the cost of funding these organizations is
passed on to policyholders. Unlike other expenses,
The Michigan Catastrophic Claims
however, these often appear as a separate charge
Association (MCCA) was established
listed on your declarations page. There are many
in 1978. The MCCA pays for claims
different descriptions for these charges, such as
paid by an insurer that exceeds a
“state mandated charges,” “statutory
certain amount.
assessments,” “programs required by state law,” or
something similar. The total charge might be made
up of the cost of one or more of these funds. However, by far the largest portion of these
charges is attributable to the Michigan Catastrophic Claims Association (MCCA).
Michigan is the only state that provides unlimited personal injury protection benefits through
its automobile insurance system. When faced with the possibility of large losses, insurers
generally purchase what is known as reinsurance. Reinsurance helps insurers avoid potential
financial difficulty by spreading the cost of these losses. A few years after the passage of
Michigan’s no-fault law, insurers found themselves unable to purchase reinsurance for the
unlimited exposure they faced through our no-fault system. The MCCA was created by the
legislature as a means of spreading catastrophic losses across the entire automobile insurance
market. The MCCA serves as a reinsurance mechanism for automobile insurers by reimbursing
them for costs that exceed a certain amount per claim.
Although created by statute, the MCCA is a private, nonprofit association. All of its dealings
are with insurance companies, not the public. Injured persons receive all of their no-fault
benefits from their insurer.
A new MCCA assessment begins July 1 of every year. The MCCA determines the amount
needed to cover the lifetime claims of all people who will be catastrophically injured in an
automobile accident over the coming year. It then assesses each insurer its share of this
amount based on the number of vehicles it insures. It is this per-vehicle assessment that may
appear as a separate item on your declarations page. Although the per-vehicle amount
assessed each insurer is the same, a company may include administrative and other
miscellaneous costs in the amount it passes through to its policyholders. Therefore, each
company’s charge for this assessment may be different.
Discounts
One way of saving money on your automobile insurance premium is through discounts. The
inserted page is a list of the most common discounts offered in Michigan by insurance
companies providing information for this guide. This list of discounts is not a comprehensive
list and you may find that several automobile insurance companies offer discounts that are
not listed in this guide.
Companies are constantly refining their discount programs, which means the discount
categories and discount amounts may change. Therefore, be sure to ask for a list of discounts
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