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Dramatic Increase in Losses in New York No-Fault Auto Claims

    MALVERN, Pa., April 18 Losses in Personal Injury
Protection (PIP) claims rose by 79 percent from 1995 to 2000 in New York
compared to 25 percent in all no-fault states, according to a new study by the
Insurance Research Council (IRC).  This increase in New York was fueled by
growth in the number of claims and in the average amount paid per claim.  The
number of PIP claims per 100 insured cars increased by 9 percent in New York
for the 1995-2000 period.  Over the same period, the average amount paid per
PIP claim in New York rose 65 percent, with a 20 percent jump in 2000.

    Claimants in New York State, and particularly in the New York City
metropolitan area, reported more extensive medical treatment than claimants in
all no-fault states, even though they reported similar injuries.  Attorneys
played a more significant role in the claims process in New York than in all
no-fault states.  In addition, New York claimants who waited more than 30 days
to report their injuries to their insurance companies were more likely to have
sprains and strains as their most serious injury and seek certain types of
medical treatment, but less likely to experience a period of restricted
activity.

    "The growth in losses in New York's no-fault auto insurance system has
been staggering in recent years," according to Elizabeth A. Sprinkel, senior
vice president, who heads the IRC.  "Reports of suspected fraud in no-fault
claims nearly tripled from 1995 to 2000, according to statistics from the New
York State Insurance Department.  The aggregate claiming behavior in New York
no-fault claims suggests that exaggeration of otherwise legitimate claims and
outright fraud may be factors in the recent New York experience."

    The results contained in IRC's recently released report, Auto Injury
Claiming Behavior in No-Fault States: An Analysis of New York PIP Trends, is
the latest in a series of IRC studies on auto injury claim trends.