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The Affordable Care Act and Property-Casualty Insurance

The Affordable Care Act (ACA) dramatically alters healthcare markets and health insurance systems in the United States. Although the property-casualty insurance industry is not directly included or targeted by the act, it is not entirely immune to its effects. This report analyzes the pathways in which ACA may affect the property-casualty insurance industry.

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Research Publications

This publication shows dramatic increases in claimed medical expenses and examines some of the factors driving them. The closed claim study, the seventh of its kind conducted by the IRC, is based on a sample of more than 35,000 auto injury claims paid in 2012. The study examines trends in claim patterns, including details on injuries, medical treatment, claimed losses and payments, attorney involvement, and fraud.
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This report presents a new methodology for studying automobile insurance affordability and examines changes and differences in affordability over time and across states. The study also inspects the drivers of automobile insurance affordability.
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This report surveys academic experts in risk and insurance on the effectiveness of prior approval and market-oriented rate regulatory policies in automobile insurance. The results show that a vast majority believe the prior-approval regulation of auto insurance rates is unnecessary and does not benefit consumers.
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Based on a detailed review of more than 30,000 auto injury claims closed with payment in 2012, this report documents substantial differences across states in the utilization of key medical diagnostic and treatment services. The study examined utilization patterns for MRIs and CT scans, as well as for treatment provided by chiropractors and physical therapists. Documenting extreme variation in utilization patterns for similar types of claims suggests opportunities for improving the quality of care provided to auto injury claimants and reducing the cost of auto injury claims.
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This report updates previous IRC studies surveying the public about the acceptability and perceived frequency of various types of insurance fraud, with special emphasis on auto insurance fraud. It also examines attitudes toward a variety of tools that insurers and law enforcement use to fight against insurance fraud, including claim handling techniques and consequences for fraudulent behavior, and the public’s willingness to perform fraud-fighting efforts. The study finds lower tolerance of fraud than in past studies and broad support for measures designed to reduce fraud.
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This study seeks to measure the impact of no pay, no play laws on the percentage of uninsured motorists. It also estimates the costs of noneconomic damages awarded to uninsured motorists in states that have yet to enact such laws. The findings suggest that not only would a properly enforced no pay, no play law result in a moderate decrease in uninsured motorists, it may also reduce auto insurance costs.
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This report documents homeowners insurance claim frequency, severity, and loss cost trends from 1997 to 2011. Countrywide and state findings are presented. Special attention is focused on the role of catastrophe-related claims. The study finds that the cost of homeowners insurance claims increased rapidly over the study period, driven primarily by a rapid increase in the severity of all claims and a slow, but steady, increase in the frequency of noncatastrophe-related claims beginning in 2006.
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This report identifies some of the key factors contributing to the large increases in PIP claim costs in Michigan from 2002 to 2011, examining changes in the composition of claimants and in treatment patterns among claims closed with payment. The study also pays special attention to the role of very large claims, with information collected on a sample of catastrophic open claims.
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This study provides evidence of the positive impact of relaxing stringent rate regulations in the automobile insurance markets of South Carolina (reformed in 1999), New Jersey (reformed in 2003), and Massachusetts (reformed in 2008). Estimates show that rate reforms have led to a number of positive developments in these markets without leading to increases in insurance prices or reductions in insurance availability. Overall, the regulatory reforms in these states have improved the performance of the insurance market for both consumers and insurers.
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New findings from an Insurance Research Council (IRC) study of auto injury claim trends indicate that insurance claim costs countrywide have recently increased, reversing previous trends of declining or relatively stable costs. The report, Trends in Auto Injury Claims, 2011 Edition, documents important auto injury claim trends, both countrywide and by state, using private passenger auto claim data from national and state-level statistical reporting agencies.
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