Why are Michigan drivers getting $400 refunds from insurance association?

DETROIT (FOX 2) - Next year, Michigan drivers will get a $400 refund per vehicle that was insured this year.

That money is expected in the spring as long as your vehicle was insured by Oct. 31, 2021.

But where is the money coming from, and why are drivers getting it back?

Drivers were paying $220 per vehicle that would go to the Michigan Catastrophic Claims Association to handle medical bills for people injured in serious car crashes.

That money led to the association projecting a $5 billion surplus by November, and Gov. Gretchen Whitmer called for the money to be given back to drivers. 

The refunds are linked to auto insurance reform laws that went into effect earlier this year. Drivers are now paying $86 per vehicle instead of the $220.

While this may seem like a nice savings for drivers, some people are concerned about how insurance changes impact crash victims who require long-term care.

MORE: Advocates said auto insurance changes harm past crash victims needing critical care

A subsection of the state’s no-fault auto reform law slashed the amount of money that insurance companies will reimburse post-acute care providers by 55%.

"I don't think that any system that doesn't protect the most vulnerable is a good system," said attorney Nick Andrews, who represents victims of serious auto crashes. "We should protect that money and protect those individuals. That's what I would like to see happen."