Study Shows Auto Insurance Claimants with Lawyers aren't Satisfied
4 October 1999
New IRC Study Shows Auto Insurance Claimants Who Hire Attorneys are Less Satisfied With Total Settlement Dollars Received Represented claimants also netted fewer dollars, on average, than
non-represented claimants, even when all sources of reimbursement are
included.
MALVERN, Pa., Oct. 1 -- When asked to consider the combined
amount of auto injury compensation dollars they received (from auto insurance
and other sources), claimants who hired attorneys reported less satisfaction
with settlements than those who did not hire attorneys, according to a new
study by the Insurance Research Council (IRC).
The IRC study, Paying For Auto Injuries: A Consumer Panel Survey of Auto
Accident Victims, is based on the reports of nearly 6,000 persons who were
injured in auto accidents in the past three years. The IRC conducted similar
studies in 1977, 1986, and 1992.
Less than half (46 percent) of auto insurance claimants who hired
attorneys reported satisfaction with net settlement amounts, compared to 73
percent of claimants who did not hire attorneys. Forty percent of auto
insurance claimants hired attorneys to help settle their claims (down slightly
from 42 percent in 1992).
Represented claimants also netted fewer dollars, on average, than
non-represented claimants. Auto insurance claimants who hired attorneys
experienced higher average medical, wage, and other expenses (though their
gross settlements were higher) while paying an estimated 32 percent of their
gross settlements in legal expenses. This helps to explain why
non-represented claimants received average net settlements that exceeded those
of represented claimants by $832.
Commenting on the study, Elizabeth A. Sprinkel, IRC's senior vice
president, noted that lower net dollars for claimants who hire attorneys
confirms findings from other IRC studies. Most recently, an IRC study of over
87,000 closed auto insurance claims revealed similar conclusions. Sprinkel
explained, "Importantly, the study shows that, even when multiple sources of
recovery are considered, represented claimants still net fewer dollars
compared to non-represented claimants."
Reports of less satisfaction among represented claimants make sense in
light of another conclusion found across IRC research: auto insurance
claimants who hired attorneys experienced longer delays in receiving
settlement dollars.
On a positive note: the new IRC study also showed that rates of increase
in average economic losses (medical, wage, and other expenses) of auto
accident victims rose more slowly than rates of inflation from 1992 through
1998. These findings are in startling contrast to previous years, where
escalating average losses of injured persons outpaced the Consumer Price
Index.
The study also showed that auto injuries are less severe. Auto injury
victims reported fewer serious injuries, less hospitalization, less absence
from work, and decreased medical treatment when compared to 1992 and earlier
studies.
The IRC study, Paying For Auto Injuries: A Consumer Panel Survey of Auto
Accident Victims, is based on the accounts of 5,768 persons who were injured
in auto accidents in the past three years. Participants in the study provided
detailed information about their auto injuries. NFO Research, Inc., a large
survey research firm located in Chicago, conducted the survey on behalf of the
IRC.
For more detailed information on the study's methodology and findings,
contact Elizabeth Sprinkel by phone at (610) 644-2212, ext. 7568; by fax at
(610) 640-5388; or by e-mail at IRC@cpcuiia.org. Or visit IRC's web site at
http://www.ircweb.org . Copies of the study are available at $25 each in the U.S.
($35 elsewhere) postpaid from the Insurance Research Council, 718 Providence
Road., Malvern, Pa. 19355-0725. Phone (610) 644-2212, ext. 7569.
Fax: (610) 640-5388.
