Last Updated on January 4, 2026 by The Insurance Pros
Michigan Catastrophic Claims Association Explained: 2026 Updates
The Michigan Catastrophic Claims Association (MCCA) plays a major role in the state’s no-fault system. It reimburses insurers for extremely high medical claims so drivers can continue to access lifetime medical coverage. Below is what drivers need to know for 2025, including updated fees, financials, and retention changes.
⏳ What Is the MCCA?
Created in 1978, the MCCA is a private nonprofit that supports Michigan’s unique no-fault auto system. Michigan is the only state that offers lifetime unlimited medical coverage for accident injuries.
The MCCA reimburses auto insurers after a claimant’s medical costs exceed the retention level, which is the amount insurers must pay before the MCCA starts covering additional expenses.
🆕 2026 Update: What Michigan Drivers Should Know
- Unlimited PIP coverage continues to carry a higher annual assessment.
- Drivers selecting capped or excluded PIP options still contribute through a smaller recoupment fee.
- Retention level increases shift more upfront responsibility to insurers before MCCA reimbursement applies.
💰 MCCA Assessment Fees (Updated for 2026)
Every insured vehicle contributes to the MCCA through an annual assessment included in Michigan auto premiums. These fees are set yearly and can change based on the MCCA’s financial position.
- 2024–2025: $90 per vehicle for drivers choosing unlimited PIP medical and $20 per vehicle for drivers choosing any other PIP level.
- 2025–2026: $82 per vehicle for drivers with unlimited PIP medical and $23 per vehicle for drivers with other PIP medical levels.
- 2026–2027 (effective July 1, 2026): $84 per vehicle for drivers choosing unlimited PIP medical and $19 per vehicle for drivers selecting any other PIP level.
Drivers who select unlimited PIP pay a higher assessment because they benefit directly from the lifetime medical coverage the MCCA supports. Drivers with capped or excluded PIP options still contribute through a smaller recoupment fee as part of the fund’s long-term stabilization.
📊 MCCA Financial Health
The MCCA continues to operate under a long-term financial recovery plan. While its position has improved over time, the association has not yet eliminated its deficit.
As of the most recently reported audited figures:
- Assets: approximately $21.6 billion
- Liabilities: approximately $23.7 billion
- Funding ratio: about 91 percent (roughly a $2.1 billion shortfall)
The MCCA’s deficit is being addressed gradually through annual assessments, investment performance, and retention level increases. Changes to fees and insurer responsibility are part of a multi-year effort to stabilize the fund without sudden premium shocks for Michigan drivers.
Since 1978, the MCCA has reimbursed more than 48,000 catastrophic injury claims and paid out over $23 billion. Claims related to traumatic brain injury, spinal cord damage, and long-term nursing care remain the largest cost drivers.
🏍️ Vehicles With Special Rates
Certain vehicles qualify for a reduced annual assessment:
- Historic vehicles: Pay 20 percent of the unlimited PIP rate (about $18 per year)
- Motorcycles: Pay the same annual MCCA assessment applied to vehicles for the applicable period
Motorcycles pay into the fund even though no-fault PIP coverage does not apply to them. They contribute because the MCCA supports the overall structure of Michigan’s no-fault system. Riders can buy optional medical benefits under a separate
Michigan motorcycle insurance policy.
⚖️ Why the MCCA Matters
Without the MCCA, Michigan drivers would face large financial risks. Drivers might:
- Face unlimited medical expenses after a severe crash
- Rely solely on health insurance with strict limits
- Attempt to sue at-fault drivers for full cost of care
- Go without essential long-term treatment
The MCCA allows Michigan to offer one of the most generous medical coverage systems in the country, even though it comes with added cost.
🔎 Want to Learn More?
The Insurance Information Institute provides a helpful overview of no-fault insurance and catastrophic claims across the U.S.
View the overview here.
📣 Final Takeaway & Next Steps
The MCCA plays a major role in Michigan’s auto premiums, especially for drivers choosing unlimited PIP coverage. Understanding how assessments work and how they change can help you make better coverage decisions.
