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INSURANCE RESEARCH COUNCIL CATASTROPHIC AUTO INJURY REPORT

 INSURANCE RESEARCH COUNCIL CATASTROPHIC AUTO INJURY REPORT
 OAK BROOK, Ill., Aug. 11/PRNewswire/ -- Auto accident victims with catastrophic injuries have estimated insurance claim costs which are now 73 percent higher than 1988 figures, according to a new study by the Insurance Research Council (IRC).
 The council analyzed 1,061 auto injury claims with unlimited no- fault medical benefits in Michigan, New Jersey and Pennsylvania. These three states enacted no-fault auto insurance laws providing unlimited medical benefits during the 1970s. Michigan continues to provide these benefits, but Pennsylvania and New Jersey repealed the unlimited benefits for new claims effective 1984 and 1991, respectively. The average expected payment (amount paid to date plus estimated future payment) for claims costing $100,000 or more was $892,800 of which 94 percent was attributable to medical expenses. A similar IRC study conducted in 1988 found an average expected payment of $515,200 for the same category of claims.
 Insurers actively involved in servicing these claims say the rising costs are due to (1) longer life expectancies because of better antibiotic treatments, (2) better medical technology to treat these catastrophic injuries, (3) cost-shifting by medical providers and medical facilities from programs with fee or service limits such as Medicare to unlimited programs like auto insurance, and (4) limited ability of insurers to challenge inappropriate or excessive treatment.
 Catastrophic injury claimants were typically young. The average age at the time of the accident was 32, and nearly half (42 percent) of the claimants were between the ages of 16 and 30. Despite the seriousness of their injuries, the average life expectancy of the claimants from the time of file review was 33 years.
 Catastrophic injury claimants as a group show traits clearly distinguishing them from typical claimants covered under the same type of policy. Sixty-five percent of the serious injury claimants were male, compared with 43 percent of the claimants from a countrywide sample of claims involving all types of injuries. Single vehicle crashes were much more prevalent among catastrophic cases, representing 50 percent of the catastrophic injury sample but only 21 percent of all types of auto injury claims. The most frequent primary injury in catastrophic cases was permanent brain damage, affecting 42 percent of the claimants, while the injury cited most frequently among countrywide claimants was back sprain or strain, indicated in 36 percent of the cases. Catastrophic injury claimants were more likely to suffer either partial or total permanent disability, reported in 82 percent of the cases, compared with just 5 percent of the countrywide cases.
 Claim cost estimates for complete quadriplegics were higher than those reported for any other injury. Expected total payments for these claims averaged $2,432,100 compared with an average of $892,800 for all catastrophic injuries as a group. Claimants with permanent brain injury had the second highest average expected payment at $1,331,600 and payments for all types of paralysis claims combined averaged $1,220,000. Together, paralysis and permanent brain injury claimants represented 62 percent of all serious injury claimants in this study.
 Catastrophic Auto Injuries is available from the Insurance Research Council, 1200 Harger Rd., Suite 310, Oak Brook, Ill., 60521. Copies are $5 each in the U.S., $10 elsewhere. The council is a nonprofit research organization that studies issues related to risk and insurance.
 -0- 8/11/92
 /CONTACT: Elizabeth Sprinkel of the Insurance Research Council, 708-572-1177/ CO: Insurance Research Council ST: Illinois IN: INS SU:


DC -- NYFNS2 -- 8778 08/11/92 07:30 EDT
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Publication:PR Newswire
Date:Aug 11, 1992
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