IRC Study -- Dramatic Increase in Losses in New York No-Fault Auto Claims

Apr 18, 2001, 01:00 ET from Insurance Research Council

    MALVERN, Pa., April 18 /PRNewswire/ -- Losses in Personal Injury
 Protection (PIP) claims rose by 79 percent from 1995 to 2000 in New York
 compared to 25 percent in all no-fault states, according to a new study by the
 Insurance Research Council (IRC).  This increase in New York was fueled by
 growth in the number of claims and in the average amount paid per claim.  The
 number of PIP claims per 100 insured cars increased by 9 percent in New York
 for the 1995-2000 period.  Over the same period, the average amount paid per
 PIP claim in New York rose 65 percent, with a 20 percent jump in 2000.
     Claimants in New York State, and particularly in the New York City
 metropolitan area, reported more extensive medical treatment than claimants in
 all no-fault states, even though they reported similar injuries.  Attorneys
 played a more significant role in the claims process in New York than in all
 no-fault states.  In addition, New York claimants who waited more than 30 days
 to report their injuries to their insurance companies were more likely to have
 sprains and strains as their most serious injury and seek certain types of
 medical treatment, but less likely to experience a period of restricted
 activity.
     "The growth in losses in New York's no-fault auto insurance system has
 been staggering in recent years," according to Elizabeth A. Sprinkel, senior
 vice president, who heads the IRC.  "Reports of suspected fraud in no-fault
 claims nearly tripled from 1995 to 2000, according to statistics from the New
 York State Insurance Department.  The aggregate claiming behavior in New York
 no-fault claims suggests that exaggeration of otherwise legitimate claims and
 outright fraud may be factors in the recent New York experience."
     The results contained in IRC's recently released report, Auto Injury
 Claiming Behavior in No-Fault States: An Analysis of New York PIP Trends, is
 the latest in a series of IRC studies on auto injury claim trends.
     For more information on the study's methodology and findings, contact
 Elizabeth Sprinkel by phone at 610-644-2212, ext. 7568; by fax at
 610-640-5388; or by e-mail at irc@cpcuiia.org .  Or visit IRC's Web site at
 www.ircweb.org .  Copies of the study are available at $10 each in the U.S.
 ($20 elsewhere) postpaid from the Insurance Research Council, 718 Providence
 Rd., Malvern, Pa. 19355-0725. Phone: 610-644-2212, ext. 7569. Fax:
 610-640-5388.
 
     NOTE TO EDITORS:  The Insurance Research Council is a division of the
 American Institute for CPCU and the Insurance Institute of America.  The
 Institutes are independent, nonprofit organizations dedicated to providing
 educational programs, professional certification, and research for the
 property and liability insurance business.  The IRC provides timely and
 reliable research to all parties involved in public policy issues affecting
 insurance companies and their customers.  The IRC does not lobby or advocate
 legislative positions.  It is supported by leading property and liability
 organizations.
 
 

SOURCE Insurance Research Council
    MALVERN, Pa., April 18 /PRNewswire/ -- Losses in Personal Injury
 Protection (PIP) claims rose by 79 percent from 1995 to 2000 in New York
 compared to 25 percent in all no-fault states, according to a new study by the
 Insurance Research Council (IRC).  This increase in New York was fueled by
 growth in the number of claims and in the average amount paid per claim.  The
 number of PIP claims per 100 insured cars increased by 9 percent in New York
 for the 1995-2000 period.  Over the same period, the average amount paid per
 PIP claim in New York rose 65 percent, with a 20 percent jump in 2000.
     Claimants in New York State, and particularly in the New York City
 metropolitan area, reported more extensive medical treatment than claimants in
 all no-fault states, even though they reported similar injuries.  Attorneys
 played a more significant role in the claims process in New York than in all
 no-fault states.  In addition, New York claimants who waited more than 30 days
 to report their injuries to their insurance companies were more likely to have
 sprains and strains as their most serious injury and seek certain types of
 medical treatment, but less likely to experience a period of restricted
 activity.
     "The growth in losses in New York's no-fault auto insurance system has
 been staggering in recent years," according to Elizabeth A. Sprinkel, senior
 vice president, who heads the IRC.  "Reports of suspected fraud in no-fault
 claims nearly tripled from 1995 to 2000, according to statistics from the New
 York State Insurance Department.  The aggregate claiming behavior in New York
 no-fault claims suggests that exaggeration of otherwise legitimate claims and
 outright fraud may be factors in the recent New York experience."
     The results contained in IRC's recently released report, Auto Injury
 Claiming Behavior in No-Fault States: An Analysis of New York PIP Trends, is
 the latest in a series of IRC studies on auto injury claim trends.
     For more information on the study's methodology and findings, contact
 Elizabeth Sprinkel by phone at 610-644-2212, ext. 7568; by fax at
 610-640-5388; or by e-mail at irc@cpcuiia.org .  Or visit IRC's Web site at
 www.ircweb.org .  Copies of the study are available at $10 each in the U.S.
 ($20 elsewhere) postpaid from the Insurance Research Council, 718 Providence
 Rd., Malvern, Pa. 19355-0725. Phone: 610-644-2212, ext. 7569. Fax:
 610-640-5388.
 
     NOTE TO EDITORS:  The Insurance Research Council is a division of the
 American Institute for CPCU and the Insurance Institute of America.  The
 Institutes are independent, nonprofit organizations dedicated to providing
 educational programs, professional certification, and research for the
 property and liability insurance business.  The IRC provides timely and
 reliable research to all parties involved in public policy issues affecting
 insurance companies and their customers.  The IRC does not lobby or advocate
 legislative positions.  It is supported by leading property and liability
 organizations.
 
 SOURCE  Insurance Research Council