Michigan PIP Auto Fee Rising July 1

Michigan drivers with auto insurance will pay more money than ever – $192 annually per vehicle – to cover unlimited medical benefits for severely injured motorists.

The fee was announced Thursday by the Michigan Catastrophic Claims Association, a state-created entity that reimburses insurers for personal injury benefits exceeding $555,000 per claim. It is a $22, or 13 percent, increase above the current $170 assessment and will cover policies issued or renewed from this July through June 2019.

The fee fluctuates each year but will reach an all-time high , surpassing the $186 assessments imposed from mid-2013 through mid-2015. Of the $192, $161 will cover anticipated new claims and expenses, and $31 will address a $2.3 billion deficit related to existing claims.

The Livonia-based association, whose board is comprised of insurance company officials, said the pending fee increase is due to higher-than-expected claim costs, partially offset by better-than-expected investment returns. It reported 16,510 open claims and $1.2 billion in spending in the last fiscal year, or $100 million a month. Nearly 56 percent of loss payments were for residential or attendant care.

Michigan is the only state to require unlimited lifetime coverage for medical expenses resulting from car crashes – typically for brain, spinal cord, neck and back injuries. It also allows health providers to bill car insurers much more for care than health insurers pay.

Legislative attempts to reduce auto premiums have stalled despite Michigan having among the highest average rates in the country. In November, the House defeated a bill that sought a cut, for five years, in personal injury protection fees for motorists choosing $250,000 or $500,000 rather than unlimited PIP coverage – which is now mandatory