Crashes involving lighter vehicles generate more expensive autoinjury claims, a nonprofit insurance industry-backed research groupreported, and said the finding could offset accident frequencydeclines linked to rising gasoline prices.

The new research may provide an understanding of how higher gasprices will affect auto insurance costs, Malvern, Pa.-basedInsurance Research Council explained.

IRC found the average auto injury claim payment in accidentsinvolving lighter-weight vehicles was 14.3 percent greater than theaverage payment in accidents involving heavy vehicles, or $5,554compared with $4,859.

According to the researchers, their findings suggest that asmore drivers are led by rising gas prices to purchase lighter andmore fuel-efficient vehicles, "the average cost of injury claimsarising from motor vehicle accidents can be expected to climb."

The IRC is the latest group in the insurance sector to enter adebate that was highlighted when New York Insurance CommissionerEric Dinallo got an insurer to drop a rate increase request citingfederal data showing motorists are driving less.

His action prompted the Property Casualty Insurers Associationof America (PCI) to announce that it was wrong to assume reducedmileage would equal less claim costs, because there is a risingexpense for repairs to crashed vehicles.

IRC Senior Vice President Elizabeth A. Sprinkel said in astatement, "The impact of higher gas prices on drivers, accidentseverity and insurance costs is anything but simple."

The IRC findings, she said, "indicate that higher average claimcosts associated with lighter vehicles have the potential tooffset, to some extent, whatever beneficial effects might occurfrom less driving. It's far too early to know how all these effectstogether will influence insurance claim costs."

To investigate the potential impact of rising gas prices oninsurance claim costs, IRC said it analyzed 9,140 personal injuryprotection (PIP) claims closed with payment in 2007.

IRC data for these claims were collected as part of theorganization's most recent auto injury closed claim study,summarized in the report, "Auto Injury Insurance Claims:Countrywide Patterns in Treatment, Cost, and Compensation, 2008Edition."

Researchers at IRC said they compared average total claimpayments for the lightest 25 percent of the vehicles involved inaccidents resulting in PIP claims with average total claim paymentsfor the heaviest 25 percent of vehicles. Only claims involvingautomobiles, minivans and sport utility vehicles were examined.Claims involving fatalities or permanent total disabilities wereexcluded to eliminate the distorting effects of these few claims onaverage cost calculations.

Of all vehicles involved in PIP claims closed in 2007, 25percent weighed 2,771 pounds or less, and another 25 percentweighed 3,726 pounds or more. On average payment for claims in thelighter-weight group was $695 more than the average payment forclaims in the higher-weight group.

IRC said there was additional evidence confirming the greaterseriousness of injuries involving lighter-weight vehicles.

Among claimants in heavier vehicles, 46 percent lost no timefrom work following their accidents. In contrast, only 38 percentof claimants in the lighter-weight vehicles lost no time from work.Claimants injured in lighter-weight vehicles were also 12 percentmore likely to be hospitalized following their injury than wereclaimants in heavier vehicles.

IRC said gasoline prices are expected to have numerousconsequences for consumers and businesses, but whether less drivingwill result in fewer accidents, and, in turn, lower automobileinsurance costs, "is unclear."

According to IRC it is clear that a reduction in the amount ofdriving is not the only consequence of higher gas prices that couldaffect automobile insurance costs. These IRC research findingssuggest higher average claim costs as another potential consequenceof rising gas prices.

IRC said more detailed information on its research is availablefrom David Corum at (610) 644-2212, ext. 7506, or by e-mail [email protected], or online at www.ircweb.org

IRC is a division of the American Institute for CharteredProperty-Casualty Underwriters. The AICPCU is an independent,nonprofit organization dedicated to providing educational programs,professional certification and research for the property andcasualty insurance business.

Though supported by insurers, the IRC states it "does not lobbyor advocate legislative positions."