How does Michigan No-Fault Insurance Affect Your Premium?

3rd highest auto insurance rates

We won’t argue with the fact that auto insurance rates in Michigan are expensive. Instead, we’ll break down the state’s no-fault policy to give you a better idea of where these steep numbers are coming from:

In recent reviews of your auto policy, you may have noticed an assessment fee, which is sometimes referred to as “Programs Required by State Laws” or “MCCA assessment”. This fee offsets the cost and coverage afforded by the Michigan Catastrophic Claims Association (MCCA), the association that provides coverage for catastrophic medical claims that occur in the state.  MCCA was created by the State Legislature in 1978 to account for Michigan’s unique auto insurance no-fault law.

Personal Injury Protection or PIP insurance is lifetime medical coverage and unique to Michigan, provides vehicle occupants unlimited lifetime coverage for medical expenses that occur as a result of an auto accident. Insurance companies operating within the state cover PIP claims up to $555,000.  Once a claim is over that threshold, the insurance company is reimbursed by the MCCA. The MCCA reviews data annually to determine what the required assessment fee will be for insurance carriers. Insurance carriers then pass that fee to policyholders on a per-vehicle basis.

Assessment Fees Graph

Research has indicated a steady incline in severe injuries along with an increase in the cost of medical treatment since 2001, which is directly associated with a steady increase in the assessment fee.  There have been 37,364 injury claims reported to the MCCA since July 1978 for a total of over $153 billion.


Individuals who are involved in catastrophic auto losses can benefit greatly by the uniqueness of Michigan no-fault. However, the downside to this unique coverage is that it places Michigan with one of the highest auto insurance rates in the country.  Legislators continue to brainstorm ways to reform Michigan’s no-fault law in an attempt to offer sufficient benefits to individuals injured in an auto accident, as well as assisting in lowering Michigan’s escalating auto insurance costs.

Whether you need guidance through handling a claim of your own, or assistance in understanding the ‘why’ behind your premium, we’re here to guide you as you navigate the intricate parts of your policy.