Attorneys and auto insurance

Motorists are being a little cautious about their auto insurance claims these days, as a new study found that more are hiring attorneys to deal with their claims. The study from the Insurance Research Council reported that 36 percent of auto insurance claims for personal injury were represented by attorneys in 2012. The use of these legal representatives has been growing over the past few years, as lawyers being used for these claims accounted for 31 percent of the cases in 2007 and has doubled since 1977.

Each state varies with attorney usage, but among no-fault states, Florida ranks the highest for personal injury protection, as more than half of these claims in 2012 had attorneys representing them. Kansas ranked the lowest, with only 12 percent of PIP claims being represented by attorneys. Attorney usage for bodily injury claims increased to 50 percent in 2012.

Attorneys may seem like a valuable resource for people to get help with their insurance claims, but IRC reported that this might not be the case for every situation. The study found that people who hire attorneys may have to wait longer to receive their claim payments and actually receive a lower net payment, the total amount received minus economic expenses and legal fees.

The study went on to show that many of these claimants had to require treatment from a medical facility and even receive an MRI, which can add to the medical bills. Elizabeth Sprinkel, senior vice president of IRC, said that the use of attorneys could be time consuming in regard to claim processing.

"The attorney involvement trends shown in this study undercut two of the envisioned benefits of no-fault auto injury systems: a less adversarial settlement process and more timely payments," said Sprinkel. "The role of attorneys is implicated in many of the factors driving up the cost of auto insurance."

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