New Study Finds That Auto Injury Claim Severity Pushes Insurance Costs Higher

Although the cars and roads of today are safer, there has been an increase in the severity of personal injury claims stemming from auto accidents. According to a study done by the Insurance Research Council (IRC), this has resulted in higher costs for insurance companies and added pressure on the cost of coverage for consumers. At the same time, the trend of more frequent claims is unclear due to the number of safety features with which today’s vehicles are fully equipped.

The 2019 Edition of the report Trends in Auto Injury Claims, examines road injury claims across states and the country, in general. To do that, it used auto insurance claim data from both state and national statistical reporting agencies. It was discovered that between 2008 and 2017, on average, insurers paid 31 percent more for personal injury claims and 26 percent more for personal injury protection (PIP) no fault claims. Annually, costs for both increased by 3.1 and 2.6 percent while inflation averaged less than two percent.

Between 2008 and 2017, out of the national bodily injury claims, there was a fluctuating frequency of those claims from 0.08 to 0.83 for every 100 vehicles that were insured. Meanwhile, the frequency of PIP claims decreased by a small amount from 1.31 to 1.27 claim for every 100 vehicles. Additionally, certain states saw a significant increase in the frequency of claims. For instance, Florida and Georgia saw bodily injury claims increase by 33 and 24 percent. Regarding PIP claims, Florida also saw an influx of them at a frequency of 10 percent during the period of 2008 to 2017.

Generally speaking, mostly all of the increase in bodily injury and PIP claim loss costs across the country were due to such rapid increases in the average cost of paid claims. Between 2008 and 2017, each of these claims saw a remarkable increase at 32 and 30 percent, respectively. States that typically have average increases that are higher than the norm in terms of bodily injury claims include Georgia with 63 percent, Louisiana with 50 percent, New York with 48 percent and Texas with 61 percent. Regarding PIP claims, states that experience increases higher than the average include Michigan with 60 percent and New York with 46 percent.

Senior Vice President of the IRC Elizabeth Sprinkel stated that this continued increase in auto injury claim severity is preventing people from enjoying the full benefits of increased safety on the road and in vehicles. She stressed that it’s important to gain a better understanding into the trend of claim frequency in some states in spite of increased vehicle and road safety and that the IRC deems cost growth as a top priority.