The law is designed to curtail rampant fraud in personal injury protection, or
PIP, due to bogus claims and staged accidents.
Pinnacle Actuarial Resources now estimates that consumer savings from the law
will range from 14 percent to 24.6 percent. That's up from a range of 12 percent
to 20 percent in a preliminary study released earlier this month.
The Office of Insurance Regulation, which contracted for the study, again noted
that projected savings are for premiums that insurers are entitled to receive,
not actual premiums. Companies often ask for lower premiums than they are
entitled to for competitive reasons, and that would lead to smaller savings.
The regulators also pointed out PIP represents only about 20 percent of an
overall insurance bill and that the savings may simply reduce future increases
rather than bring down premiums. If there are savings, they will not be realized
until Jan. 1 at the earliest.
The state's insurance consumer advocate, Robin Westcott, painted a more
optimistic picture. She said she expects the savings will be greater than those
estimated by Pinnacle.
The law calls for a minimum 10 percent premium savings but that companies can
avoid that requirement by explaining why they can't cut that much.
The no-fault system pays up to $10,000 for injuries regardless of who is at
fault in a crash. The new law puts a 14-day limit on seeking treatment and caps
benefits at $2,500 unless a doctor or other specified medical professional
certifies there's an emergency medical condition.
The new law's premium reductions do not go into effect until after Jan. 1.