Copyright 2009 Insurance Business Weekly via VerticalNews.com
Insurance Business Weekly
November 22, 2009
EXPANDED REPORTING; Pg. 23
457 words
INSURANCE INFORMATION INSTITUTE; I.I.I. Finds NY's No-Fault Claims Costs Are Rising
New York's auto insurers saw their typical no-fault payment for the medical care of accident victims rise by 56 percent to $8,748 per claim in the second quarter of 2009. This represents a dramatic increase from late 2004, when the average no-fault payment stood at $5,615 per claim, according to an Insurance Information Institute (I.I.I.) analysis. The insurance industry, the New York State Insurance Department's (NYSID) Frauds Bureau, the National Insurance Crime Bureau and law enforcement agencies continue to investigate suspicious claims vigorously, according to Dr. Robert Hartwig, the I.I.I. president and an economist. Yet loopholes in the no-fault system make it particularly vulnerable to fraud and abuse by a "no-fault industry" of corrupt medical professionals, attorneys, and street-level criminals who work on their behalf. "In less than five years, New York's auto insurers have seen an extraordinary 56 percent increase in the average cost of no-fault claims, to a great extent the result of abuse and, sometimes, outright fraud in the system," stated Dr. Hartwig, in remarks scheduled for delivery today to the New York Insurance Association's (NYIA) annual meeting in Latham, NY. "The costs of fraud and abuse of the state's no-fault system ultimately are borne by New York's honest policyholders. New York's no-fault claim costs are now the second highest in the country and are 111 percent higher than the U.S. average of $4,152." "State lawmakers need to make no-fault auto insurance reform a high priority when they reconvene in Albany for their 2010 session," said Ellen Melchionni, president of the NYIA. "There are external forces which drive up the cost of auto insurance in this state which can and must be contained." The state Insurance Department's Frauds Bureau, in its 2008 annual report, said that no-fault fraud reports to the NYSID had increased 22 percent since 2006, after the number of these same reports fell 35 percent between 2003 and 2006, Dr. Hartwig observed. Moreover, the Frauds Bureau has significantly expanded its number of no-fault investigations, its 2008 annual report stated. The term "no-fault" auto insurance is often used to denote any auto insurance program that allows policyholders to recover financial losses, such as medical costs and lost wages, from their own insurance company, regardless of fault. The policyholder's no-fault benefit coverage is listed under the personal injury protection (PIP) provision of their policy. Keywords: Insurance Information Institute, Finance, Financial, Insurance, Investing, Investment. This article was prepared by Insurance Business Weekly editors from staff and other reports. Copyright 2009, Insurance Business Weekly via VerticalNews.com.
November 12, 2009
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