I knew it! I knew it all along, folks! Sure, my vehicular hoarding tendencies did get me into some trouble with the The Law, but it was all worth it because I’m now officially rich.
I don’t even know what I’m going to do with all of those Benjamins. Actually, I do. I’m probably going to buy at least two cars. We’ll see. Anyway, I’m getting ahead of myself. Let’s get to the news.
Michigan is refunding drivers $400 per insured vehicle as a way to compensate for the exorbitant insurance charge Michiganders have been paying (a 2019 reform brought those costs down) into a fund that has really ballooned out of control. Here’s the operative bit of the press release about the $400 refund, per the State of Michigan:
The refund plan submitted to [Department of Insurance and Financial Services] Monday by the [Michigan Catastrophic Claims Association] will return money to every Michigander with an auto insurance policy in force as of 11:59 p.m. on October 31, 2021. Eligible consumers do not need to take action in order to receive a refund. The surplus funds will be turned over by the MCCA to the insurance companies operating in Michigan by March 9, 2022, and the insurers will be responsible for issuing checks to eligible policyholders. DIFS will direct insurers to issue refund checks to consumers as expeditiously as possible, but in no event later than 60 days after the transfer of funds.
Yeehawwww! I own 13 cars, and while only eight of those are insured in the state of Michigan (one is in Germany, the remaining four are broken), that’s still enough money to make me basically rich. I’ll be eating caviar and sipping on a 1947 French Cheval-Blanc before you know it! Hopefully Michigan doesn’t require the cars to have been registered, because I only had one or two tagged in late October; but everything I’ve read seems to indicate that it’s all about how many cars folks had insured on October 31. Here’s a bit more info from the state of Michigan:
The MCCA’s analysis determined that approximately $3 billion of the surplus could be returned to policyholders while ensuring continuity of care for auto accident survivors. The refund plan submitted to DIFS Monday by the MCCA will return money to every Michigander with an auto insurance policy in force as of 11:59 p.m. on October 31, 2021...The surplus funds will be turned over by the MCCA to the insurance companies operating in Michigan by March 9, 2022, and the insurers will be responsible for issuing checks to eligible policyholders.
Anyway, a bit more context. That “continuity of care for auto accident survivors” bit of the above paragraph refers to a gigantic catastrophic claims fund that Michigan car owners have had to pay into as part of the state’s No-Fault insurance setup. Specifically, Michigan forced all motorists to pay into a fund that would cover lifetime medical expenses for anyone injured in a vehicle crash. The Michigan Catastrophic Claims Association — the organization that will be paying Michiganders next year via car insurance companies — breaks it down, writing:
The Michigan Catastrophic Claims Association (MCCA) is a private unincorporated, nonprofit association created by the Michigan Legislature in 1978. From the time the Legislature created the MCCA until July 2, 2020, Michigan’s unique no-fault insurance law required the owners and registrants of motor vehicles registered in Michigan to buy unlimited lifetime coverage for medical expenses resulting from motor vehicle accidents.
The thing is, this fund has gotten so massive that there are billions of dollars just sitting there, dormant (the “surplus” mentioned in the block quote before the previous one). For years, citizens and politicians have discussed changing the No-Fault rule to bring down costs to consumers, and folks have been trying to do something with all of that stagnant cash. In 2019, the state changed the No-Fault rule and brought down car insurance rates; now something is happening with the mound of greenbacks. From the MCCA:
At a Special Meeting of the Michigan Catastrophic Claims Association’s (the “MCCA’s”) Board of Directors held on November 3, 2021, the Board unanimously determined that it could fund all of its anticipated liabilities while returning a significant portion of its estimated surplus to Its member insurance companies to refund to policyholders. As of June 30, 2021, the MCCA’ s assets of $27 .290 billion exceeded its estimated liabilities of $22.254 billion, resulting in an estimated surplus of $5.036 billion. Thus, the MCCA’s assets exceeded its estimated liabilities by approximately 22.63% as of June 30, 2021. The estimated surplus resulted from realized and expected savings from reforms to Michigan’s no-fault insurance law and higher than projected investment returns.
The MCCA will return approximately $3.0 billion of its estimated surplus to its members for refund to policyholders on the policies discussed below that were in force as of 11:59 p.m. Eastern Standard Time on October 31, 2021. The MCCA will retain the balance of the estimated surplus to ensure its ongoing ability to provide reimbursements for personal protection insurance benefits.
I just called my insurance company, who confirmed that I have eight vehicles currently insured.
I’m not entirely sure what my payout will be, because the MCCA says “the Refund Per Historical Vehicle will be $80 for every historical vehicle insured on the in-force date.” It’s not clear to me whether this means a vehicle registered as a historic vehicle or one insured as a historic vehicle (does registration have anything to do with the refund? I really hope not). My 1979 Jeep Cherokee, for example, has historic vehicle tags, but it’s not insured as a historic vehicle.
In any case, I’m hoping it’s all about whether cars are insured as historic vehicles, in which case I’ll be handed 8*$400=$3,200. Or, if for some reason, the payout is about the vehicle’s latest registration, it’ll be 7*$400+$80=$2,880. Or, if for some reason this only covers cars with active registration, I’ll just continue eating instant ramen noodles.
But I really don’t know why having a vehicle registered in relevant to this refund, so I think March is going to be a great month for me. I knew that rusted-out 1958 Willys FC-170 was a solid (okay, maybe that’s the wrong word) investment. I kept telling people this, but they just didn’t believe me! At least Instagram user jurassicmj25 understands.