CPAN blasts the raid of billions from the catastrophic claims fund set aside for catastrophic accident victims

CPAN blasts the raid of billions from the catastrophic claims fund set aside for catastrophic accident victims
Consumer advocacy group again calls on DIFS to investigate overcharging

LANSING, Mich.—(Nov. 4, 2021)—The Michigan Catastrophic Claims Association Board announced yesterday that it voted unanimously to take action as requested Nov. 1 by Gov. Gretchen Whitmer to refund up to $5 billion in auto insurance premiums to Michigan drivers.

“This move is a gift to auto insurers,” said CPAN President Devin Hutchings. “Gov. Whitmer and the MCCA are financing refunds by raiding a fund designed to care for survivors of catastrophic auto accidents, even as victims continue to lose care due to Michigan’s government-mandated 45%-cut on care reimbursements. Without a doubt, consumers deserve relief from high premiums charged by auto insurance companies with deep pockets and jaw-dropping profits — but the source of those refunds matter.”

The catastrophic claims fund was designed specifically to pay for the care for survivors of serious auto crashes and is funded through insurance assessments that drivers must pay annually. 

“More and more survivors are losing care every day that passes,” Hutchings said. “Auto insurance companies and the State of Michigan must keep their promise to auto victims of life-altering accidents to provide the care that drivers paid for through premiums over the years.”

A recent report from the Consumer Federation of America found that auto insurance companies overcharged drivers by $1.12 billion in 2020, when the pandemic significantly reduced driving and claims.

“As the watchdog for Michigan policyholders, CPAN recently called on the Michigan Department of Insurance and Financial Services (DIFS) investigate whether these illegitimate profits should be returned to drivers, and we are once again calling on DIFS to carry out its oversight role,” Hutchings said. “We are again calling on DIFS to step up for consumers and take a serious look at whether auto insurers owe Michigan drivers refunds.”