Medical expenses reported by auto injury claimants continue toincrease faster than the rate of inflation, in spite of the factthat the severity of the injuries themselves remain on a downwardtrend.

In a new study, the Insurance Research Council (IRC) found thatfrom 2007 to 2012, the average claimed economic losses—whichinclude expenses for medical care, lost wages and otherout-of-pocket expenditures—grew 8% annualized among personal injuryprotection (PIP) claimants, reaching $14,207 per claimant in2012.

Among bodily injury (BI) claimants, average claimed losses grew4%, reaching $10,541 in 2012. Over that same period, measuressuch as the percentage of claimants who had no visible injuries atthe accident scene or who had fewer than 10 days in which they wereunable to perform their usual daily activities provided evidence ofa continuing decline in the severity of injuries.

The study examines several factors in the growth in medical carecosts, including the shift toward more expensive treatment anddiagnostic alternatives as well as dramatic increases in billedcharges for visits to many types of medical providers. The use ofpain clinics, attorney involvement, and claims abuse were found toexacerbate the increases in medical care expenses.

Click on the next page to view totalBI payments and a breakdown of PIP-related injury costs for thestudy period.

“Medical care costs continue to escalate, especially amongfirst-party claimants,” reports Elizabeth Sprinkel, senior vicepresident of the IRC. “Looking forward, the industry will need tocontinue its vigilance in contending with these expanding costs,particularly as it monitors the possible spillover effects fromgeneral healthcare reform.”

Titled, “Auto Injury Insurance Claims: Countrywide Patterns inTreatment, Cost and Compensation, 2014 Edition,” the report is theseventh of its kind. IRC collected data on more than 35,000 autoinjury claims closed with payment under the five principal privatepassenger coverages to conduct the study. Twelveinsurers—representing 52% of the private passenger auto insurancemarket in the Unites States— participated in the latest iteration.The report shows results about injury, medical treatment, claimedlosses and total payments, attorney involvement, and the appearanceof fraud and buildup.

For more detailed information on the study's methodology andfindings, visit the IRC website.