Claimed Auto Injury Losses in N.Y. Metro Area Rose 70% in 10 Years

Considering our last blog was about New Jersey car insurance quotes – why not follow up with an interesting article from Insurance Journal about claimed auto injury losses in the New York Metro Area?

The article reads:

Personal injury protection (PIP) claims closed in 2010 show that
claimed losses for medical expenses, lost wages, and other expenses from
auto accident injuries in the New York City area rose 70 percent over
the past decade.

This surpasses the 49 percent hike in medical care inflation over the
same period. The findings were reported by the Insurance Research
Council in Malvern, Pennsylvania.

The average claimed loss per PIP claimant in the New York metro area
was more than double the average loss among claimants from the rest of
the state, $15,086 compared with $6,870, the study found.

The report says underlying this disparity are dramatic differences in claiming behavior between upstate and downstate claimants.

Differences in Claiming Behavior

Claimants from the New York City metro area were much more likely to
visit chiropractors, physical therapists, and acupuncturists, to receive
expensive diagnostic procedures, to report durable medical equipment
expenses, to be treated in pain clinics, and to hire attorneys.

Statewide, nearly one in four (23 percent) claims in the study
involved the appearance of claim abuse — either fraud, material
misrepresentation of the facts of the claim; or buildup, inflated
medical or other expenses in an otherwise legitimate claim.

Brooklyn, Queens Are Particular Hotspots for Claims Abuse

Claims from the New York City metro area were more than four times as
likely to involve apparent abuse, 35 percent compared with 8 percent in
the rest of the state.

The study identified Brooklyn and Queens as particular hotspots for
abuse. More than half (52 percent) of apparent abuse claims stemmed from
accidents occurring in either Brooklyn or Queens even though these two
boroughs accounted for only 28 percent of all claims in the study.

The study also highlighted the role medical providers play in the current wave of no-fault fraud affecting the state.

In addition to detailing the claimants’ treatment patterns, the study
also looked at the percentage of medical providers who produce bills
with charges in excess of the state’s fee schedule, hire attorneys, and
file lawsuits.

“This report further details the problem of claim abuse in New York,
especially unscrupulous medical providers who overtreat and overcharge
claimants and their insurers,” said Elizabeth Sprinkel, senior vice
president at the Insurance Research Council.

“Even when the excessive charges can be mitigated, the costs of
combating these fraudulent activities are further driving up the price
of insurance for all consumers in the state.”

The study examined detailed claim information from over 4,500 claims
closed in 2010. Ten insurers, representing 70 percent of the private
passenger auto insurance market in New York, participated in the study.

The Insurance Research Council is a non-profit division of the
American Institute for Chartered Property Casualty Underwriters and the
Insurance Institute of America.

 -Robert Catalano