No matter what your payment schedule looks like, car insurance isn’t cheap. In fact, major car insurance companies pull in billions of dollars every year. The pandemic didn’t change that. However, it did change the driving habits of many Americans. Generally speaking, Americans drove fewer miles, had fewer accidents, and filed fewer insurance claims in 2020 than in other years. As a result, insurance companies and other agencies were able to sit on huge amounts of profit. Because of that surplus, drivers in Michigan will start receiving insurance refund checks in 2022.
Michigan governor Gretchen Whitmer announced the statewide insurance refund on Tuesday, December 7th, according to Detroit Free Press. The money will come from the Michigan Catastrophic Claims Association. The MCCA is a nonprofit corporation operated by the insurance industry. Insured Michiganders funded the corporation with the surcharges on their insurance premiums for decades. Now, the MCAA has a surplus of over $5 billion, and $3 billion of that will go back to Michigan drivers.
Some advocates worry that the insurance refund plan will hinder the MCCA. Its sole purpose is to help pay the long-term medical bills of those who are catastrophically injured in auto accidents. However, Gov. Whitmer claims that the MCCA will have no problem carrying out its mission while also putting money back in the pockets of insured Michiganders.
Details about the Michigan Insurance Refund Plan
The insurance refund plan starts with the MCCA delivering a combined $3 billion to insurance companies in Michigan. Then, those companies will disburse the money to insured drivers. The companies will get the money by March of 2022 and Michiganders will start seeing checks in the early part of the second quarter of the year.
All insured Michigan drivers are eligible for the insurance refund checks. The only stipulation is that they had an active auto insurance policy before the first of November of this year. Not only is it easy to qualify but getting the money is also simple. Those who qualify just have to wait on the check or direct deposit to come in.
The insurance refunds will be $400 per insured vehicle. This includes cars and trucks as well as motorcycles. However, those vehicles with “historical vehicle” plates will only garner a refund of $80.
Whitmer on Refunds
About the insurance refunds, Governor Gretchen Whitmer said, “These refunds and the recently announced statewide average rate reductions are lowering costs for every Michigan driver. Michiganders have pain into the catastrophic care fund for decades.”
Lt. Gov. Garlin Gilchrist spoke about the refund plan as well. Gilchrist called the insurance refund a victory for all motorists in Michigan. More specifically, it is a victory for those who live in Detroit. Those motorists, he said, “have paid the highest insurance rates in the nation for decades.”