The insurance industry is reporting data that suggests there has been a dramatic decrease in automobile accidents in recent years – but that people are more likely than ever to claim injuries as a result of those accidents. According to the Pennsylvania-based Insurance Research Council, there has been a drop in the frequency of auto accidents throughout the country over the past two decades. But according to the IRC’s recent study, “Trends in Auto Injury Claims,” people are now more likely to claim injuries as a result of auto accidents.
The trend is prevalent in Rhode Island, which ranks fourth in the country in terms of bodily injury claim frequency with 1.85 per 100 insured cars, according to the IRC.
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But lawyers dispute the IRC numbers, suggesting instead that accident claims have decreased in recent years. Further, they point out that while well-built cars may not be sustaining as much damage as a result of accidents, it does not mean the people in them are not getting hurt.
Insurance industry experts cite several reasons for what they say is a rise in accident claims, including a rise in health-care costs and the price of new cars.
But they also point a finger at their lawyer counterparts.
“We have an awful lot of lawyers in Rhode Island – and some of them will take on almost any kind of case,” said Roger L. Messier, of Butler & Messier, Inc., in Pawtucket.
Messier is not alone in his opinion.
Joseph Annotti, assistant vice president of public affairs at the National Association of Independent Insurers in Des Plaines, Illinois, agrees that several contributing factors have resulted in more expensive accident claims.
“New cars do cost more – and cost more to fix,” he said.
Annotti also acknowledges that health care costs have climbed. But like Messier, he also points a finger at lawyers.
“The average cost has gone up for a variety of reasons and one is attorney involvement,” said Annotti.
Annotti said that even if the cost is not found in awards paid out by the courts, the insurance company has to pay to defend itself. He also cites an increase in medical costs.
But Henry Monti, a lawyer with Gemma Law Associates in Warwick, disputes the insurers’ claims.
”It’s simply not true,” Monti said.
Monti said the number of claims filed in Superior Court has declined in each of the last five years. He also points out that workers’ compensation cases have been cut in half in recent years, evidence that counters claims of frivolous lawsuits.
Monti questions the IRC numbers.
”A number of the insurance industry statistics are from organizations funded by the insurance companies,” he said.
According to the IRC study, auto accidents — as measured by property damage claims — decreased 17 percent from 1980 to 1998. They dropped from 4.94 per 100 insured cars in 1980 to 4.09 in 1998. During the same period, bodily injury claims resulting from those accidents climbed 33 percent, going from 0.88 per 100 insured cars in 1980 to 1.17 in 1998.
The cost of injuries per insured car in the United States increased at an average annual rate of 7.4 percent, while property damage costs rose only 2.7 percent per year in the six-year period of 1987 to 1993, according to the IRC. Nationwide, the injury cost per insured car increased 54 percent, from $138 to $212 between 1987 and 1993. In sharp contrast, according to the IRC, average property damage costs rose only 17 percent, from $54 in 1987 to $63 in 1993.
The injury rate, however, has recently shown signs of improvement. After peaking at 1.22 in 1995, it declined in 1996, 1997, and 1998.
”The good news is that we are seeing improvement in accident frequencies as a result of a variety of safety measures, such as safer designs of cars and roadways and active campaigns against drinking and driving,” said Elizabeth A. Sprinkel, senior vice president of the IRC. “However, the increased propensity of people to claim injuries remains a serious concern, although the recent improvement is encouraging.”
Raymond Paccia, of Paccia & Paccia, a law firm in Pawtucket, is the president of the Rhode Island Trial Lawyers Association. Statistics showing a decrease in accidents, but a rise in injury claims, would be news to him, he said.
“I don’t know of any data suggesting there has been a decrease in car accidents,” said Paccia.
If in fact, it were the case, he said, frivolous lawsuits would not be the cause.
“There seems to be a phenomena, where cars are becoming more crash worthy,” said Paccia. “The relationship between property damage and injury has become askew. You don’t see as much property damage, but the forces inside the car are the same and people are getting hurt.”
Paccia quarrels with the suggestion that over-zealous lawyers are at the root of any increased number of claims or a backlog in the civil justice system.
“The idea that lawyers are prodding people on to abuse the civil justice system to get a profit is just anti-trial lawyer rhetoric, which , unfortunately, is at an all time high,” he said.
In fact, Paccia points a finger of his own at the insurers.
“A large part of the claim process is the fault of the insurers who are offering peanuts to settle cases,” he said.
The IRC study also found that accident and injury rates, as well as claim costs, varied broadly among and within the states. Massachusetts had the highest accident frequency in 1998 at 7.06 property damage claims per 100 insured cars, compared with Wyoming, which had the lowest rate of 3.05. Massachusetts also had the highest bodily injury claim frequency at 2.29 per 100 insured cars compared with North Dakota’s 0.20 rate.
Messier said the IRC study underscores the need to address a serious problem for the insurance industry.
”The insurance companies have had three or four good years in Rhode Island, but the experience has turned and it’s going to sour,” he said. “We have to do something before the rates get out of whack. We’re just letting ourselves get eaten alive a nickel at a time.”
Messier said the most important step in addressing the problem is to enact no fault insurance, an issue that has been bandied about the State House for several years.
Meanwhile, Paccia thinks the insurers should look in another direction in assigning blame for the ills of the system at hand.
”There are probably some people out there who do in fact try to abuse the civil justice system, but that’s like one bad apple spoiling the bunch,” said Paccia.
