New York PIP Insurance Update: Is New York's No-Fault Crisis Returning?

This updated PowerPoint report by Robert Hartwig, president of the Insurance Information Institute, analyzes the deterioration of New York State’s no-fault auto insurance system and offers solutions to fix it.  The report found that New York’s no-fault personal injury protection (PIP) average claims costs—at $8,690 per claim—are the third highest in the U.S. (as of the third quarter of 2009); that the average cost of a no-fault claim has soared by $3,075, or 55 percent, from $5,615 at the end of 2004 to $8,690 in the third quarter of 2009; and that no-fault claim costs as of the third quarter of 2009 are just 5.9 percent short of their all-time high of $9,235 in the first quarter of 2002.  The presentation offers examples showing how the insurance industry was successful in getting its message out to the press in 2001.  A number of potential solutions to reduce costs in New York’s no fault system have been advanced, including instituting medical protocols/utilization reviews, requiring that disputes be resolved via arbitration, increasing penalties for runners, streamlining the process for adjudicating no-fault claims and implementing fair burden of proof requirements. The proposed solutions are described.