Medical expenses tied to auto injury insurance claims have outpaced inflation, even though there has been a downturn in the seriousness of those reported injuries, according to a study recently released by the Insurance Research Council (IRC).
According to the report—Auto Injury Insurance Claims: Countrywide Patterns in Treatment, Cost and Compensation—the average claimed economic losses reached $14,207 per personal injury protection (PIP) claimant in 2012, growing at an annualized rate of 8 percent from 2007. Economic losses include expenses for medical care, lost wages and other out-of-pocket expenditures. Among bodily injury (BI) claimants, the rate of average claimed losses grew 4 percent to $10,541 in 2012 from 2007.
However, the study found that over the same period, measures such as the “percentage of claimants who had no visible injuries at the accident scene” or who had “fewer than 10 days in which they were unable to perform their usual daily activities” provided evidence of a continuing decline in the severity of injuries.
The study also looked at a variety of factors in the upswing of medical care expenses, including the shift toward more costly treatments and diagnostic alternatives as well as dramatic increases in billed charges for visits to numerous types of medical providers. The use of pain clinics, attorney involvement, and claim abuse were found to exacerbate the increases in medical care expenses, the study found.
“Medical care costs continue to escalate, especially among first-party claimants,” Elizabeth Sprinkel, senior vice president of the IRC, announced. “Looking forward, the industry will need to continue its vigilance in contending with these expanding costs, particularly as it monitors the possible spillover effects from general healthcare reform.”
The 2014 edition of the study is the seventh of its kind conducted by the IRC. The council collected data on more than 35,000 auto injury claims closed with payment under the five principal private passenger coverages. Twelve insurers, representing 52 percent of the private passenger auto insurance market in the United States, participated in the study. For more information, visit IRC’s website at http://www.insurance-research.org.