Michigan insurance refunds start this week. When drivers should expect their $400 checks

Michigan automobile owners are about to receive a $400 check for every single vehicle they insure in the state and payments will start hitting bank accounts and mailboxes as early as this week. But there are a lot of people with a lot of questions that need to be answered.  

The $400 refund checks issued to drivers are intended for those who had their vehicles insured by Oct. 31, 2021. The refund is part of bipartisan auto reform legislation passed in 2019 that requires the Michigan Catastrophic Claims Association (MCCA) to issue money back to drivers. 

Over the next 60 days, the $400 refunds owed to drivers will be deposited electronically in bank accounts. Gov. Gretchen Whitmer first announced the rebates in December 2021, with guarantees that refunds will be transferred from the MCCA to insurers by Wednesday, March 9. 

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"The Governor directed DIFS to take an active role in ensuring that refunds would be issued expeditiously to Michiganders who have paid into the fund for decades," said Anita Fox, who heads the Department of Insurance and Financial Services. "The DIFS bulletin ensures that consumers are protected and imposes a May 9, 2022 deadline for issuing refunds to all eligible drivers."

But, while it seems straightforward enough, there are a few things to note. Below are the most common questions about the refunds that everyone needs to know.

How much will Michigan Drivers get back?

For every vehicle that you owned and insured as of Oct. 31, 2021, you will get a $400 check for each one.

Own and insure an RV in Michigan? $400. Motorcycle? $400. Ford F-150 or Chevrolet Corvette? $400 each.

The amount of money drivers will receive is per vehicle that's covered under a plan. Take the number of vehicles you have insured and multiply it by 400. 

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If a household has a car, truck, RV, and a motorcycle, under the same insurance plan, then the owner would receive a $1,600 refund. 

Who is eligible for Michigan's insurance refunds?

Anyone who insured their vehicles - whether it's a car, truck, RV, or motorcycle - by 11:59 p.m. Oct. 31, 2021, is eligible for a refund. 

So, if you bought a car on Nov. 1, 2021, you're out of luck for the $400 refund. Conversely, if you sold a car before Oct. 31 and it wasn't insured at that time, you're also not going to get money for that vehicle.

How do I get my insurance refund from Michigan?

This one is simple. The refund check or an ACH deposit will be automatically issued. 

So, unlike your taxes (which are due a little more than a month) you don't have to do a thing. Just go about your life, check your bank account now and then and your mailbox every day - and get that refund when it arrives.

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The money isn't coming from Michigan, however, it's coming from your auto insurance company.

When will I get my insurance refund?

You will start receiving the refund this week as all funds were due to the state's Department of Financial Services (DIFS) on March 9.

If you don't receive it within 60 days (May 9, at the absolute latest), you need to reach out to your insurer. 

If you still have questions that you and your insurance company can't resolve, contact the state by calling Monday through Friday 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437) or emailing autoinsurance@michigan.gov.

What vehicles are eligible for the insurance refund?

Cars and trucks are the obvious ones. But so are RVs and motorcycles. As long as they were all insured at the end of October, they're eligible.

Trailers are not included. 

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If you were keeping a car in storage and it only had comprehensive coverage, it is also not eligible.

Will drivers that didn't select unlimited PIP still get a refund?

Yes. According to DIFS, all vehicles with a proper insurance plan by Oct. 31, 2021, will get a refund. 

While reforms opened up the option for drivers to pay less for reduced coverage relating to personal injury protection, selecting one of the available options other than ‘unlimited’ will not affect the refund amount.

Are there refunds for insured historic vehicles?

The MCCA only charges 20% of their typical assessment for historical vehicles due to their limited allowable use, DIFS says. As long as the vehicle was injured by the appropriate deadline, drivers will get a refund of $80. 

How do the insurance refunds impact auto accident survivors?

They don't. The refund does not impact the care that auto accident survivors are entitled to.

The MCCA determined that there was a $3 billion surplus that should be returned to policyholders. That's where the $400 per vehicle is coming from.

What if there's a problem with insurance companies?

If you own a car and it is insured in Michigan, you are entitled to either a check or ACH deposit. It does not matter if you have an unpaid balance with your insurance company - the company must pay you the money.

Also, if your insurer tries to refund the money in a gift card or a discount, contact DIFS by calling Monday through Friday 8 a.m. to 5 p.m. at 833-ASK-DIFS (833-275-3437) or emailing autoinsurance@michigan.gov or file a complaint at Michigan.gov/DIFScomplaints or email DIFSComplaints@michigan.gov.

What if you changed your insurance company?

If you changed your insurance company after Oct. 31, the insurer that was covering you on that day will be responsible.

If you don't get your refund by May 9, don't contact your new insurer - call your previous insurer and figure out what is happening.

Is the insurance refund taxable?

Maybe. This is going to be a bit complicated.

Generally speaking, the refund is NOT taxable. However, people who deducted their insurance premiums as a business expense may be required to include all or a portion of this refund as income.

If you think this applies to you, contact your tax professional.

Are fleet vehicles included in the insurance refund?

Yes, they are. The refund is dependent on how they're identified in the fleet's insurance policy:

  • For vehicles that are individually identified in the policy, such as by VIN or license plate number, the full MCCA refund of $400 per vehicle will be given for each vehicle.
  • For policies that are written on a per-plate basis, such as those used by car dealerships with license plates that are moved from car to car as needed, the MCCA refund of $400 will be calculated and sent on a per-plate basis.
  • For commercial fleet policies that are written on a gross-receipts basis, or for other types of policies where individual vehicles cannot be identified, the refund will be calculated as 135% of the applicable in-force commercial auto PIP written premium related to those policies.

Additional information about the auto insurance reform law can be found at Michigan.gov/AutoInsurance