Michigan drivers will continue to pay a Michigan Catastrophic Claims Association (MCCA) per-vehicle assessment fee that is substantially lower than the fee charged before the state’s 2019 auto no-fault reforms. The MCCA announced its new assessment on October 8, 2025, following a review of the association’s finances and projected expenditures for the coming fiscal year.
What the new fee will be
Effective July 2026, the annual MCCA per-vehicle assessment will be:
- $84 for drivers who select unlimited Personal Injury Protection (PIP) coverage, up from the current $82.
- $19 for drivers who select less than unlimited PIP coverage, down from the current $23.
The $2 increase for drivers with unlimited PIP coverage is lower than the rate of inflation, according to the MCCA. Before the 2019 reforms took effect, all Michigan drivers paid $220 per vehicle.
How the fee is calculated
The MCCA per-vehicle assessment is made up of two components: a pure premium and a deficit recoupment charge.
The pure premium reflects the funds needed to reimburse insurance companies that are required to cover the unlimited lifetime cost of care for people expected to be catastrophically injured in the coming fiscal year. Only drivers who select unlimited PIP coverage pay the pure premium.
The deficit recoupment charge is added, by state law, when the MCCA’s estimated liabilities—discounted to present value—exceed its assets. All drivers pay the deficit recoupment charge to make up the shortfall.
The table below shows the breakdown of the current and new assessment fees:
| Fiscal Year | Pure Premium | Deficit Recoupment | Assessment (Unlimited PIP) | Assessment (Other Limits) |
| 2025/2026 | $59 | $23 | $82 | $23 |
| 2026/2027 | $65 | $19 | $84 | $19 |
According to the MCCA, the deficit recoupment charge is dropping because of improved investment performance in the second half of the fiscal year. The pure premium is increasing because of higher projected costs for long-term care services—particularly agency attendant care and residential care—which the association says has risen at a rate significantly higher than inflation, due in part to court decisions related to the 2019 reforms.
The fee in historical context
The MCCA assessment has fluctuated significantly over the past decade, driven by changes in claim costs, investment performance, and the structural changes introduced by the 2019 reforms. Reported per-vehicle fees for drivers with unlimited PIP coverage in recent years include:
| Fiscal Year | Assessment (Unlimited Pip) | Assessment (Other Limit) |
| 2017/2018 | $170 | All Drivers Paid |
| 2019/2020 | $220 | All Drivers Paid |
| 2020/2021 | $100 | $0 |
| 2021/2022 | $86 | $0 |
| 2022/2023 | $886 | $0 |
| 2023/2024 | $122 | $48 |
| 2024/2025 | $90 | $20 |
| 2025/2026 | $82 | $23 |
| 2026/2027 | $84 | $19 |
Before the reforms, every insured vehicle in Michigan paid the full assessment regardless of coverage selection. The 2019 reforms (Public Acts 21 and 22 of 2019), signed into law on May 30, 2019, ended the requirement that all drivers carry unlimited PIP medical coverage. Beginning with policies issued or renewed after July 1, 2020, drivers could choose among coverage levels of $50,000 (for drivers enrolled in Medicaid), $250,000, $500,000, or unlimited. Drivers enrolled in Medicare gained the option to opt out of PIP medical coverage entirely.
As a result of the reforms, only drivers who select unlimited PIP coverage pay the pure premium portion of the assessment, while the deficit recoupment charge applies to all drivers. The 2023/2024 fiscal year saw the introduction of a deficit recoupment charge after the MCCA reported an estimated deficit, which the association said would be amortized over 15 years.
What the MCCA said
“When we look at the data, we can clearly see the positive effects of the reforms, with out-of-control medical costs decreasing for many of the costliest procedures,” said MCCA Executive Director Kimberly Bezy. “Prior to passage of the reforms in 2019, drivers paid $220 for every vehicle. Starting July 2026, the fee will be $84 for drivers selecting unlimited Personal Injury Protection and $19 for those selecting other coverage limits.”
Bezy added that the association’s financial position allows Michigan to maintain its no-fault medical benefits: “Thanks to the MCCA’s strong financial stability, Michigan is able to offer the most generous auto insurance benefits in the country. We are proud to continue working to support a stable, sustainable insurance market and make Michigan’s unique auto no-fault coverage more accessible and more affordable.”
About the MCCA
The Michigan Catastrophic Claims Association is a private, non-profit association that serves as the state’s reinsurer for auto insurance companies. Created in 1978, the MCCA reimburses insurance companies for medical costs above a set threshold for people who are catastrophically injured in motor vehicle crashes, enabling insurers to provide Michigan’s no-fault coverage.
Sources
- Michigan Catastrophic Claims Association, “MCCA per-vehicle assessment fee remains significantly lower than before the 2019 auto no-fault reforms,” October 8, 2025. https://michigancatastrophic.com/public-announcements/
- Michigan Department of Insurance and Financial Services (DIFS), Auto Insurance Reform FAQ. https://www.michigan.gov/difs/industry/insurance/faq/no-fault-faq
- Michigan Department of Insurance and Financial Services, Section 271 (MCL 500.271) Report: 2025. https://www.michigan.gov/autoinsurance/-/media/Project/Websites/autoinsurance/PDFs/AutoInsurance/Section_271_Report_2025.pdf
- AAIS Views, “MCCA Issues New Assessment Fee for 2025-2026.” https://aaisviews.aaisonline.com/compliance-alerts/mcca-new-assessment-fee-2025-2026
