Starting on July 1 Michigan drivers can expect to pay an additional $30 per vehicle for auto insurance.

The current Michigan Catastrophic Claim Association charge is $145, but will be raised to $175 until June 30, 2013, when a new premium has to be set.

The raise is aimed at reducing a $2 billion deficit in the person injury protection fund, which is used to reimburse insurance companies for clients who are facing catastrophic injuries.

According to a MCCA press release, the current $2 billion deficit is equal to $310.78 deficit per insured car in the state of Michigan.

Vice President of Alliant brokerage firms Michigan office Patricia Cosman said, the new law doesn’t affect insurance companies because they didn’t get to keep the money in the first place. She went on to explain all money that is collected from the $175 fee has to get sent to the PIP fund.

All auto insurance companies in Michigan are required to be members of the MCCA and build into their insurance premiums the MCCA charge for the PIP fund.

Cosman said, “Don’t get mad at your insurance companies because they don’t event get to keep the money.”

The MCCA uses the PIP funds to pay insurance companies back for claims that exceed $480,000.

In 2011, the MCCA paid out $927 million to insurance companies compared to $811 million in 2009.

The PIP was created in 1978 by the MCCA to pay back insurance companies because of Michigan’s no-fault auto insurance policy. Michigan is the only state in the U.S. to have such a policy.

The no-fault policy provides unlimited medical, rehabilitation and pay benefits, to people involved in accident regardless of fault.

Since 1979, there have been over 24,500 claims reported to the MCCA, which cost an estimated $71 billion, according to a MCCA press release.

OU student Kevin Brady explained he has the lowest cost insurance plan because that is what he can afford, so adding additional fees for the same coverage is stupid. “I don’t wanna pay more for the same coverage,” he said.