NCCI Report On Auto Accidents Has Interesting Subrogation Numbers

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Auto Accidents Report Has Interesting Side Statistics

The NCCI report on Auto accidents. NCCI (National Council on Compensation Insurance) is the largest rating bureau in the nation.  Their statistics cover 21 or more states.   One of most dangerous places to work is in your automobile according to their report.

Graphic Of Shield Auto Accidents Logo Inside
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Surprisingly, the number of auto accidents that result in injury has been reduced by 37% since 1966 while the number of miles driven has tripled.  This was likely due to safety enhancements over the past 35 years.

One interesting area of the report is subrogation. Subrogation is basically pursuing a third party that may be responsible for all or part of an accident.

According to NCCI,  at 60 months after date of injury, about 1% of all claims involve subrogation. For motor vehicle claims, the percentage involving subrogation is almost 25%.  The 25% figure is not an unexpected amount.  Unless the accident involved a single car,  there would be an element of subrogation to the accident.

The astounding figure is the average amount of subrogation is over 20% lower for motor vehicle claims than for all claims at 60 months ($8,570 for motor vehicle claims vs. $10,871 for all claims).   There was no direct explanation as to why auto accidents are not more expensive.

One reason is that if a claim is subrogated for other than an auto accident,  the injuries sustained must have been more severe.  Another reason could be auto insurers are much more aggressive and knowledgeable on pursuing third parties than Workers Comp insurers.

If the auto adjuster pursues another party for an injury, Workers Comp insurers can subrogate their claim and “go along for the ride.”

This indirectly proves Workers Comp claims adjusters are rarely, if ever, trained in spotting third parties that may be responsible for an injury.  For instance, if a machine in a lumber yard malfunctions and causes an injury, subrogation opportunities are being passed over quite often.

Picture of Auto Accidents man holding Car
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The basis of the subrogation claim should always be the recorded statement taken by the Workers Comp adjuster.   The adjusters gloss over the malfunctioning machine in the example. This can leave big Workers Comp $$ behind.

Many years ago, I was trained on subrogation very heavily.  However, I was an all-lines adjuster.  I was not specifically a Workers comp adjuster.

Should more than 1% of all non-auto claims be subrogated against another party?  I  would have to say definitely yes.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

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  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
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