New N.Y. Data Shows Larger Auto Injury Cost Drop

NYAAIF said that while New York remains the insurance fraud capital of the country, a crackdown on such activity has helped reduce the average personal injury protection (PIP) claim.

The organization cited the actions of insurance companies, law enforcement agencies and prosecutors, the state insurance fraud bureau, and a statewide public information program.

It noted a report by the Insurance Information Institute that:

? The average injury claim cost (known as PIP claims) in 2003 is $6,788, down from $8,571 in 2002.

? While New York's PIP costs were one percent above the national average in 2003, they peaked 26 percent above the countrywide average in the first quarter of 2002.

However, the I.I.I. analysis also reported that the number of PIP claims rose 2.4 percent in 2003, compared with a decline of 0.8 percent nationally, and
the frequency of PIP claims in New York is 18 percent above the national average.

Bernard Bourdeau, president of the New York Insurance Association in Albany, speaking for the NYAAIF, said, "It's possible that the success of fraud-fighting efforts have caused insurance criminals to try and fly under the radar of investigators by filing smaller bogus claims, but more of them."

Mr. Bourdeau cited several reasons for the positive trends, including greater recognition on the part of law enforcement, prosecutors and the public of the costs of fraud.

He also reported that insurers are now able to utilize a tough anti-fraud measure issued by the state insurance department. The measure, known as Regulation 68, requires people injured in auto accidents to notify their insurance company within 30 days of an accident, rather than 90 days, and submit proof of medical, wage loss and other expenses within 45 days, rather than 180 days.

The regulation was implemented after trial lawyer and medical groups lost an extended legal battle to block the measure.

"The prolonged notification periods allowed corrupt medical professionals to generate masses of bogus treatment bills before the insurance company had a chance to thoroughly investigate them," said Mr. Bourdeau.

As he has many times in the past, Mr. Bourdeau noted that the legislature has not acted on a package of additional anti-fraud measures proposed by Gov. George Pataki and the insurance department that insurers believe would make it easier to combat fraud.

The proposals include criminal penalties for "runners" who solicit participants in fraud scams, medical protocols and decertification of corrupt medical providers.

"Tough anti-fraud measures are required to build on the progress made to date and secure future gains," said Mr. Bourdeau.

According to Mr. Bourdeau, the public now has a greater awareness of costs of fraud both through higher insurance premiums and as potential victims of staged accidents. Millions of New Yorkers, he said, have seen television commercials or heard radio ads produced by NYAAIF which demonstrate the impact of insurance fraud on New Yorkers.