As per the reports from the NAIC or National Association of Insurance Commissioners, New Jersey had seen a rise in the combined average premium on personal auto insurance, during 2009.Sources from the insurance industry state that PIP costs have to be readjusted in order to maximize dollars for consumers and medical service providers as well.During 2010, the Department of Banking and Insurance had stated that increased rates were due to higher PIP costs. Hence, new PIP regulations had been proposed, where over 1,000 procedures would be added to the existing medical fee schedule. It also included bringing about reforms to the arbitration system and putting additional state oversight authorities into place to overlook PIP vendors who administer benefits.
Auto insurance companies have been complaining that they are forced to pay high medical costs for those involved in auto accidents because of the PIP system, whereas, the government programs and health insurance pays much less for the same services. Patrick Breslin, spokesman, New Jersey Manufacturers Insurance Co., states that the billing disputes would be greatly reduced with the change in medical fee schedule. Although they may seem much higher for auto insurance companies, when compared to Medicaid, Medicare, and health insurance, it will help in adding predictability and also control costs.
The proposed regulations will be reviewed by the state and action would be taken very soon. Marshall McKnight, DOBI spokesman stated that the report highlighted the necessity for additional PIP reforms. According to the National Association of Insurance Commissioners 2008-2009 report, the combined personal auto insurance premiums in New Jersey had risen to $1,217.96 during 2009, while it was $1,197.91 in 2008. This included collision, comprehensive, liability coverage states the Auto Insurance Database Report.
McKnight also stated that the department’s comment period had accomplished its task and they had listened to whatever had being said. Now, they would go ahead and take the opportunity to improvise on the proposal and make it even better, he added. The current proposal will help consumers get more value for their money, as they can expect to get better treatment for the same premium costs, because all the wasteful expenditure would be removed from the present system.
Only around 25% of the whole proposal that was made by DOBI will see the proposed changes. Hence, only the parts that have seen significant changes would be open for comments in accordance with the Administrative Procedure Act, which was signed by Gov. Chris Christie.
