Policy Studies Insurance

R Street Shorts – Michigan Catastrophic Claims Association

Under Michigan’s unique personal injury protection auto insurance system, every insured driver in the state must pay a fee to the state-run Michigan Catastrophic Claims Association and, in return, receives unlimited medical coverage for auto accidents.

Michigan auto insurers pay the first $500,000 of PIP claims, while the MCCA pays amounts that exceed that total. A family of four drivers with five cars would pay roughly $900 a year to cover the MCCA fee.

The benefits of the system are that catastrophic accidents can be very expensive and impose a lifelong financial burden that the MCCA relieves. However, on the other hand, the chances of being in a life-altering accident are not high, while the costs to pay for other people’s life-long medical expenses are. Michigan is the only state with this sort of law.

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