Insurance claims cost more after state's repeal of helmet law: study

Publish Date: 
May 30, 2013

ARLINGTON, Va. - The average insurance payment on a motorcycle injury claim rose substantially in Michigan after the state changed its helmet law to exempt most riders last year, a new analysis by the Highway Loss Data Institute (HLDI) indicates.

The result is consistent with previous studies that show that rescinding helmet requirements results in more fatalities and hospital admissions, although this study was based on a survey of insurance claims data and did not track whether or not riders were wearing helmets when they crashed, HLDI acknowledged.

The increases in claim severity and overall losses were statistically significant, but the change in claim frequency was not, according to HLDI.

HLDI said insurance loss trends confirm motorcyclists' injuries in the state have become more serious. Analysts compared medical payment (MedPay) losses from the 2010-2011 riding seasons with the 2012 season. MedPay coverage insures against injuries sustained by motorcycle operators. Since many motorcyclists stow their bikes for the winter, only data from May through September were included in the study.

For more than 40 years, Michigan required all motorcycle riders to wear helmets. However, as of April 12, 2012, the requirement was changed to apply only to riders younger than 21. All riders in the state may choose to ride without a helmet if they have either passed a motorcycle safety course or have held the motorcycle endorsement on their driver's license for at least two years. Unhelmeted riders also must carry at least $20,000 in medical coverage.

HLDI measures insurance losses three ways:

  • by claim frequency, or rate;
  • claim severity, or the average amount paid on each claim; and
  • overall losses, which is the product of frequency and severity.

HLDI compared losses in Michigan with losses in Illinois, Indiana, Ohio and Wisconsin — where helmet laws did not change. The agency also controlled for motorcycle age and class; rider age, gender and marital status; weather; and other factors.

HLDI found that MedPay claim frequency was 10 percent higher than would have been expected without the law change, claim severity was 36 percent higher, and overall losses were 51 percent higher. The increases in claim severity and overall losses were statistically significant, but the change in claim frequency was not.

Further calculations were done to account for changes in policy limits that resulted from the law change in Michigan. HLDI analysts said they knew that the law's new requirement -- that helmetless riders carry at least $20,000 of MedPay coverage -- would affect claim severity and overall losses if riders who previously carried less coverage increased their insurance limits. That's because policies with higher limits will pay more for serious injuries than those with lower limits.

To see how much of the change in severity was a result of riders going without helmets as opposed to such coverage changes, researchers controlled for policy limits, finding that claim severity still increased 22 percent after the new law went into effect.

"Weakening the helmet law seems to have made it somewhat more likely that riders will sustain injuries, but the big impact has been on the seriousness of the injuries," says David Zuby, chief research officer of HLDI and the Insurance Institute for Highway Safety. "Helmets can't protect against all injuries, but they do help prevent debilitating and often fatal head trauma."

Analysts said the data debunks the idea that helmets make crashes more likely by increasing rider fatigue and impeding visibility and hearing. By that logic, the crash rate should decline when a helmet requirement is repealed. However, HLDI analysts found that claim frequency under collision insurance, which covers crash damage to a motorcycle and is the coverage most likely to come into play after any crash, rose 12 percent. (Collision claim severity remained unchanged.)

The fact that the claim rate didn't fall once helmets were no longer mandatory undercuts the argument, they said.