Some Michigan motorists could receive $400 auto insurance refunds as early as this week, according to Gov. Gretchen Whitmer.
But it also could be May before some residents receive checks or automatic deposits from their insurance companies. The deadline for auto insurers to send the money to policyholders with eligible vehicles is May 9, Whitmer’s office said in a news release.
Whitmer, a Democrat, held an event in Detroit on Tuesday with Mayor Mike Duggan to remind residents the refunds are coming, after sending out a Monday news release with the same message.
The reminders follow a December advertising campaign highlighting the auto insurance refunds that were paid for by a pro-Whitmer group, Put Michigan First, that is affiliated with the Democratic Governors Association. Together, they demonstrate how the refunds, which Whitmer requested in November, are a central talking point for Whitmer as she seeks a second four-year term in November.
“These $400 refunds are game-changers for so many Michigan families,” Whitmer said in a news release. “I called for these refunds because I am committed to lowering costs for Michiganders and putting money back in people’s pockets. They are possible because we worked across the aisle to pass bipartisan auto insurance reform, and we will keep working together to grow our economy and build a state where families can thrive.”
“The timing of this is ideal for her,” said Detroit communications consultant Karen Dumas, who served as communications director for former Detroit Mayor Dave Bing. “Everybody is feeling the pain at the pump and inflation,” and “$400 to a lot of people sounds like a lot of money.”
Dumas said the refunds are “political or performative,” and most residents are not considering other questions, including whether the refunds should be larger; whether they should have been sent directly to consumers, rather than to insurance companies; the impact of reduced coverage under Michigan’s 2019 changes to the state’s no-fault auto insurance law; and sharply reduced care for many accident victims who were catastrophically injured before the law was changed.
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Detroit residents, in particular, still pay unfairly high premiums relative to the rest of the state, Dumas said.
“The consumer is on the short end of the stick, this time with $400 in their pocket,” she said.
The news release said the Michigan Catastrophic Claims Association, a fund controlled by the insurance industry, will complete the transfer of $3 billion in surplus funds to Michigan’s auto insurers this week. Once complete, the transfer will trigger a 60-day deadline for auto insurers to send out required $400 refunds per vehicle to eligible Michiganders no later than May 9.
To be eligible, residents had to have a vehicle insured in Michigan last Oct. 31. More information about the refunds can be found on the website of the Michigan Department of Insurance and Financial Services.
The MCCA has more than $27 billion in assets, according to its most recent financial statement, but has been holding a surplus, partly as a result of auto insurance coverage changes under the 2019 law.
The refunds are coming from the MCCA fund, which pays for catastrophic care and gets its money from a catastrophic claims surcharge that used to be tacked on all auto insurance premiums. That fee, which was $220 per vehicle in 2019, has since been significantly reduced and is now only paid by motorists who opt for lifetime catastrophic claims coverage.
Whitmer said the fund will continue to hold $2 billion in surplus funds “to ensure continuity of care for catastrophic accident survivors.”
Kevin Rinke, a Republican candidate for the governor who formerly was an investor in a company that worked with victims of traumatic brain injury, has called the insurance reforms a “bad program” and accused Whitmer of taking “credit for giving us our own money back” right before an election.
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