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Risk can take on a new meaning under challenging circumstances. Under a weakened economy, fraud and abuse become more acceptable to the general problem. States may decide to crack down and implement laws that are already on the books. In an effort to offset the increase in lawsuits, no fault products are introduced to new and existing clients. All of these are possible factors in the increase of personal injury auto insurance claims.

Consumers take inventory of everything in their lives when times are tough. Luxury items can be postponed while necessities are scaled down to their bare minimum. Auto premiums are considered a necessary expense for most, but studies have shown that the number of consumers who submit fraudulent personal injury claims increases in the midst of an economic downturn. Many contact companies for auto insurance quotes and decide they are entitled to some retribution, rationalizing fraud. Ironically, the increase in fraudulent claims makes auto insurance rates higher for everyone.

While the industry watches fraud and abuse in the insurance industry, the states determine liability. Currently, 13 states require PIP or Personal Injury Protection. As health insurance rates rise, consumers may find a more attractive auto insurance quote that includes PIP. This allows the consumer to not have to rely on traditional health insurance in the event of personal injury after an accident. As PIP becomes more popular, the number of personal injury claims is on the rise.

The states continue to involve themselves in the behavior of insurance companies and consumers in the insurance industry. One pivotal way is requiring drivers to maintain some level of insurance coverage. This requirement exists in all but two states—Wisconsin and New Hampshire. These states, however, require drivers to prove that they can cover the cost of potential damages related to a car accident including personal injury. In order to protect all drivers on the road, states are now implementing strict fines and even jail time for drivers who choose to be uninsured. The increase in numbers of auto insurance policies, as a result of measures enforcing insurance laws, has led to an increase in personal injury claims.

Auto insurance and the ability to manage the cost of auto insurance premiums are constantly on the mind of consumers. During times when the entire country is experiencing economic hardships, auto insurance rates and specifically personal injury claims are subject to rise. States begin to focus on the needs of all drivers by ensuring coverage will be there when needed. At the risk of increasing auto insurance rates, insurance companies attempt to manage the fraud and abuse associated with personal injury claims.