New York must take steps to reduce medical costs and the amount of litigation involved with auto accidents to reduce insurance rates in Brooklyn and elsewhere, according to the American Insurance Association.
“People in Brooklyn are 75 percent more likely to file an injury or liability claim than the statewide average and the cost of each claim is 60 percent greater, showing higher attorney involvement, greater reliance on soft tissue injuries and greater use of diagnostic tests. All of this has created significant problems for insurers in managing the risk environment and for consumers in paying the necessarily higher insurance premiums,” said David Snyder, AIA vice president and assistant general counsel, in testimony at a joint hearing conducted this week by the Assembly Insurance Committee and the Brooklyn Borough President.
AIA offered several solutions for the problem, including the following: the implementation of medical management tools to reduce the amount of overutilization and fraud; making policies with lower no-fault limits available to consumers (the current minimum no-fault benefit of $50,000 is the third highest in the nation); reducing litigation by updating the verbal threshold and other steps and increasing anti-fraud and accident prevention efforts.
AIA also urged the elected officials to embrace policies that would reportedly increase competition among insurers, including competitive rate regulation and allowing broad use of credit-based insurance scores. And to avoid anti-competitive proposals that would increase bureaucracy and politicize rate-setting.
“Less competition means fewer choices for consumers and potentially higher than necessary prices. Further, when markets are tight, it is imperative to do those things that will encourage capital investment, not discourage it,” added Snyder.
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