Insurance organizations gathered on February 4 to urge the New York State Senate Insurance Committee to take action on the state’s no-fault automobile insurance system. The Property Casualty Insurers Association of America (PCI) and the Insurance Information Institute (I.I.I.) were among the organizations testifying that no-fault costs are out of control and unethical medical providers and collections attorneys are abusing the system.

According to I.I.I., under current New York no-fault laws, motorists may sue for severe injuries and for pain and suffering only if the case meets certain conditions. These conditions, known as a threshold, relate to the severity of injury. Because high threshold no-fault systems restrict litigation, they tend to reduce costs and delays in paying claims. Verbal thresholds eliminate the incentive to inflate claims that may exist when there is a dollar "target" for medical expenses. However, the institute says, in some states the verbal threshold has been eroded over time by broad judicial interpretation of the verbal threshold language, and personal injury protection (PIP) coverage has become the target of abuse and fraud by dishonest doctors and clinics that bill for unnecessary and expensive medical procedures, pushing up costs.

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