PIP reform is again in the spotlight, as a report out this week from the National Association of Insurance Commissioners says New Jersey’s combined average premium for personal auto insurance rose in 2009 from 2008 — the most recent years for which data are available — with insurance industry and state sources saying personal injury protection costs need to be controlled to maximize dollars for medical providers and consumers.
Last year, the state Department of Banking and Insurance, which said higher PIP costs were responsible for 50 percent of the increased rates detailed in the report, proposed new PIP regulations that would add more than 1,000 procedures to the medical fee schedule, reform the arbitration system and put in place additional state oversight authority of PIP vendors hired by insurers to administers benefits.
Insurers have complained that the PIP system forces them to sometimes pay higher medical costs for auto-related injuries compared to what health insurance and government programs pay for the same services.
“Although the schedule’s fee amounts are significantly higher for auto insurers than health insurance, Medicare and Medicaid, the proposal would help reduce billing disputes, control costs and add predictability,” said Patrick W. Breslin, spokesman for New Jersey Manufacturers Insurance Co.
The state continues to review the proposed regulations, and action is expected soon.
“The report highlights the need for additional PIP regulatory reform,” said DOBI spokesman Marshall McKnight.
New Jersey’s average combined personal auto insurance premium, including liability, collision and comprehensive, rose to $1,217.96 in 2009, from $1,197.91 in 2008, according to NAIC’s 2008-09 Auto Insurance Database Report.