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Three Times More Is Back! (sort of)

by David Rumsey | June 20th, 2019

Every few years, the Insurance Research Council (IRC) analyzes a sample of data pertaining to automobile liability insurance claims. Then they slow-drip a series of reports summarizing different aspects of their findings. At cj Advertising, we carefully select a few of these reports to purchase and review. Why only a few? Because while some of these reports contain value, others are complete duds, and all of them are wildly overpriced.

Based on our knowledge of the IRC, 2018 Country Wide Patterns in Auto Insurance Claims seemed to be a good bet to be the new source for the golden message of three times more. Unfortunately, this report doesn’t give the specific numbers to completely reaffirm this celebrated factoid. But it does give us enough useful information to be confident that three times more is still in play.

Insurance Research Council 2018

The line “On average, car accident victims with a lawyer get over three times more money than those without a lawyer” is based on comparing the average bodily injury (BI) claim payments for people with and without attorneys. Unfortunately, the 2018 report omits these two specific data points. It does, however, provide enough breadcrumbs to deduce that the message is still viable:

  • As of 2014, BI payments for car accident victims with attorneys was trending up to nearly three and a half times more.
  • In the most recent 2018 report, total average BI payments, regardless of attorney involvement, increased 6% per year to $15,037.
  • Attorney involvement in bodily injury claims is now up to 52%, a 20-year high.
  • The net reimbursement ratio (more on this in a minute) for people with attorneys gained three cents on the dollar on the net reimbursement ratio for people without attorneys.
Net reimbursement ratio: with attorney Net reimbursement ratio: without attorney
2014 $.71 $1.14
2018 $.78 $1.17

Since the total average BI payment is up, attorney involvement is up, and the net reimbursement ratio for people with attorneys is up—it seems likely that the total average BI payments for people with attorneys is even higher than in the 2014 report. We just don’t have enough data to algebraically say for sure.

But what is the net reimbursement ratio?

The net reimbursement ratio is the IRC’s contrived rebuttal to the three times more message. This number is meant to make readers believe that people with a lawyer get less money. Yeah right. The equation assumes that car accident victims pay 32% out of pocket for legal fees separate from the BI settlement and that people without a lawyer incur no future crash-related expenses. Both assumptions are, at best, guesstimates outside the scope of this report and, at worst, verifiable bullshit.

Going Forward with Three Times More

For future advertising, we advise that you do one of two things: either include the year 2014 in your source citation, or just list the source as “Insurance Research Council” without giving a year.

Three times more has been true ever since the beginning of our agency and the current report indicates that it’s likely still true. After all, the IRC chose to omit the attorney/no attorney BI payment amounts for a reason. I suspect it’s because the unpublished numbers make their industry look even worse.