Understanding the Michigan Catastrophic Claims Association, Assigned Claims Plan

We discuss the changes to auto no-fault laws that took effect over the last few years often around here due to the complexity of how those laws affect motorists following a crash resulting in catastrophic injuries. During segments of WLAJ 53 “In the Name of the Law,” Lansing personal injury attorney, Steve Sinas, discussed those changes, and in one specific segment he spoke about what’s called the Michigan Catastrophic Claims Association (MCAA), and the Assigned Claims Plan (ACP). If you haven’t heard of either of these two entities, it’s time to read up on them and understand the significant role they play in Michigan motor vehicle collisions.

What is the Michigan Catastrophic Claims Association?

The Michigan Catastrophic Claims Association (MCCA) is, at its core, a reinsurance fund. The fund is responsible for reinsuring lifetime uncapped benefits afforded to people under their auto policy. Following a crash that left someone injured, the injured person must first turn to their own auto insurance policy, and that policy pays the claim. However, after a person accrues $550,000 in costs associated with their motor vehicle injuries, the MCCA fund will reimburse any amount of money over that limit to the insurance company.

Another important reminder:  not everyone has lifetime uncapped benefits mentioned above following 2019 law changes, now motorists must choose to pay for those benefits.

Learn more about those benefits and why you need to understand how the policy affects you by clicking here.

How is the Michigan Catastrophic Claims Association funded?

The Michigan Catastrophic Claims Association is funded through all motorists when they purchase their individual auto policies. If you look at what’s called your policy declaration sheet, one of the lines will show a contribution to the MCCA. Drivers have been paying into that fund for years, leading to a surplus of over $20 Billion to help pay the claims of those who are seriously injured.

What is the Assigned Claims Plan?

The ACP comes into play for individuals who are qualified for no-fault insurance benefits, but they don’t have their own policy, nor is their one owned by someone in their household. This can include someone who doesn’t have a car and only uses a bike.

Here’s how it works:

1. You file a claim with what is technically known as the Michigan Auto Insurance Placement Facility
2. The facility takes in the claim and assigns it to an insurance company that participates in the Assigned Claims Program.
3. Currently, six insurance companies participate in that program including:
   1. Allstate
   2. AAA
   3. Citizens
   4. Nationwide
   5. Farm Bureau
   6. Farmers
4. That company steps in, and they must pay the claim, as if it was one of their policyholders, despite them having nothing to do with the injured person.

How did 2019 reform change the Assigned Claims Plan?

Prior to Michigan’s auto no-fault policy change, everyone who filed under the plan was able to receive lifetime uncapped medical coverage, however now, in almost every case, those expenses will be capped at $250,000 of coverage.

If you have medical expenses above that amount, and you didn’t cause the crash, it is possible that you might have the right to file a liability claim against the at-fault party.

This is also another result of the changes made in 2019, and you can learn more about those types of claims by clicking here.

Where does the Assigned Claims Plan get the money to pay for those in the program?

Ultimately, the money will also come from the Michigan Catastrophic Claims Association, though it’s not as explicit to drivers on their declaration page that they’re helping pay those funds. Highlighting those payments, all motorists who purchase insurance pay for both the MCCA and the ACP, not just those who have policies with the six participating insurance companies.

“Michigan no-fault insurance is not intuitive,” said Sinas. “There are these entities that exist, you have to understand how they work, and ultimately how they affect your rights as an injured person.”