(CBS Detroit) -- The Michigan Catastrophic Claims Association plans to refund $400 per vehicle next year after Gov. Gretchen Whitmer called to return surplus funds to policyholders.
Drivers are expected to receive checks in the second quarter of 2022, Whitmer and the Department of Insurance and Financial Services (DIFS) announced on Tuesday.
The refund plan will return money to Michiganders with an auto insurance policy in force as of Oct. 31. The funds will be turned over by the association to insurance companies operating in the state by March 9, 2022.
The insurers will be responsible for issuing the checks to eligible policyholders.
"These refunds and the recently announced statewide average rate reductions are lowering costs for every Michigan driver," Whitmer said in a press release.
"We are working together to put Michigan drivers first, and I am directing DIFS to ensure that the MCCA and Michigan's auto insurance companies accurately, fairly, and promptly issue these refunds."
In November, Whitmer called on the MCCA to issue checks, citing a $5 billion surplus.
In a letter to the association, the governor cited a 2019 law that cut insurers' medical costs for people injured in crashes. The surplus was up from $2.4 billion a year before, according to a report issued in the summer. She also said many residents have faced financial hardships during the COVID-19 pandemic.
The MCCA is a state-created nonprofit entity that reimburses car insurers for health care claims surpassing $600,000. Michigan used to require motorists to pay a unique, annual per-vehicle fee for unlimited health coverage until passage of the law.
The association voted unanimously to grant the refunds a few days later.
"DIFS stood with Governor Whitmer in calling upon the MCCA to return surplus funds to Michiganders with auto insurance, and we applaud the MCCA for taking the necessary next steps to deliver the largest refund possible to drivers while maintaining the viability of the fund," said DIFS Director Anita Fox. "In the coming months, DIFS will work to ensure that refund checks are issued to Michigan consumers as quickly as possible."
Meanwhile, drivers without insurance are urged to take advantage of the amnesty period, which expires on Dec. 31. Michigan's auto no-fault reform provides amnesty to previously insured drivers, meaning they could obtain insurance without penalty or increased premiums.
After Dec. 31, uninsured drivers risk facing higher rates of penalties if they get into a vehicle crash.
© 2021 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
for more features.