ST. PAUL, Minn., March 1 – The Property Casualty Insurers Associ-ation of America (PCI) has released a study blaming Minnesotas no-fault auto insurance system for the states current insurance rates, which PCI cited as generally higher than the rates in neighboring states. The no-fault system, the study charges, encourages inflated billing, over-treatment, and allows far too many claims to go to court.

The study was presented by the Insurance Federation of Minnesota (IFM) to Minnesotas Joint Senate Commerce Committee and House Commerce and Financial Institutions Committee during an informational/policy hearing.The committee, which met prior to the beginning of the legislation session, took no action on the issue.

PCI stated that the study reviews the performance of Minnesotas no-fault law in the context of its effect on insurance claiming patterns.The analysis compares the average price for auto insurance in this state with the remaining Upper Midwest region and countrywide, and contrasts the injury loss experience incurred by drivers in Minnesota against those of the nation, surrounding states and other no-fault states.

According to the study Minnesotas full coverage auto insurance premiums are 19th highest in the country, while several other neighboring states rank among the least expensive.Further-more, auto insurance in Minnesota is getting more expensive compared to the rest of the country.In 2000, this states average full coverage premium was ranked at 24th highest.

By any measure, Minnesotas auto insurance system is very costly, said Michael Harrold, vice president and regional manager for PCI.Based on our study, we found that the Minnesota no-fault system is burdened by expensive health care coverage, higher-than-average amounts of medical care utilization, treatment and provider costs, especially for chiropractors, an increase in the rate of filing liability claims, and greater attorney involvement.These factors result in the cost of auto insurance being out of line with many other Midwestern states.These findings clearly demonstrate the need for reform.