More than one in four auto accidents resulted in bodily injury liability (BI) claims in 2003, according to a recent study by the Insurance Research Council (IRC). The study, Trends in Auto Injury Claims, 2004 Edition, reveals that BI claim rates have remained high even though IRC research suggests that auto accident rates and the seriousness of auto injuries have decreased in recent years.
“Indicators such as extent of disability, days of restricted activity, and time lost from work tell us that auto accidents are producing fewer serious injuries. The good news is that auto safety campaigns and the manufacture of safer cars have made a difference,” said Elizabeth A. Sprinkel, senior vice president of the IRC. “Clearly, the injury liability claim rate is influenced by the attitudes and behaviors of auto accident victims, and that rate has increased over time,” said Sprinkel.
IRC’s recent study uses the ratio of BI claims for every 100 property damage liability (PD) claims to measure the likelihood that BI claims will be filed in auto accidents (PD claim rates approximate auto accident rates in the United States). In 1980, 17.9 BI claims occurred for every 100 PD claims — in other words, slightly fewer than one in five auto accidents produced BI claims that year. By 2003, the BI to PD ratio increased to 26.4. The 2003 ratio is an improvement over the ratio in 1995, however, when 29.5 BI claims occurred for every 100 PD claims.
The increase since 1980 in the BI to PD ratio is the result of opposing trends in BI and PD claim rates. From 1980 to 2003, the BI claim rate increased by 19 percent, to 1.05 BI claims per 100 insured cars. At the same time, the PD claim rate decreased by 20 percent, to 3.97 PD claims per 100 insured cars. The IRC’s latest report contains BI and PD claim rate information for all 50 states and shows that state claim rates vary widely.
People who are injured in auto accidents not only receive compensation for medical treatment and other accident-related expenses under the BI coverage, but also they receive compensation for the pain and suffering and emotional distress associated with their auto injuries. BI awards are paid by auto insurers of at-fault drivers. One reason that BI claim rates vary from state to state is differences in auto insurance laws. In no-fault states, for example, BI claims can be filed only when the cost for treatment of auto injuries exceeds a specific dollar amount in medical expenses or when a verbal description of injury-related impairment is met. Other states do not have these requirements.