High usage of providers and expensive treatments in the state, especially in New York City, "is creating a crisis in the New York no-fault system," said Elizabeth A. Sprinkel, senior vice president of the IRC.

That increase in claim cost in New York, the study found, was five times the medical care inflation rate for non-PIP care in metropolitan New York. It found also that claim frequency rose 7 percent in New York while declining 2 percent in other no-fault states.

According to the IRC research, the one-in-four rate of fraudulent claims was caused by exaggeration of medical expenses, along with unnecessary treatments or padding claim-related costs.

The findings were contained in a study titled Claiming Behavior in New York's No-Fault Auto Insurance System: An Analysis of Close PIP Claims, based on examination of 2,800 paid claims. Twelve insurers took part in the study.

Brooklyn, the researchers said, had particularly high claims and abuse fraud, and to a lesser extent, Queens and the Bronx.

The study found that New York City claimants, when compared with upstate residents:

? Hired attorneys at nearly four times the rate of the rest of the state.

? Reported more neck and back sprains, and 47 percent reported three or more injuries from an accident?twice the statewide average.

? Were more likely to seek treatment from a larger number of medical professionals, including chiropractors, neurologists, physical therapists, psychotherapists and alternative treatment providers, and were less likely to be treated in hospitals.

? Received diagnostic procedures more often that involved magnetic resonance imaging (MRI) and electromyography (EMGs).

? Were two to three times more likely to wait more than 30 days before reporting injuries to insurance companies and were two times more likely to have waited more than 45 days before submitting medical bills.

IRC said delayed reporting and bill submission "are potentially important contributors to no-fault auto fraud, since current rules within New York allow 90 days for claimants to report injuries and 180 days to submit medical bills."

Insurance companies, IRC noted, have only 30 days to pay claims, even if fraud is suspected. If they don't pay, they face legal action for bad-faith claims practices.

The state insurance department has ordered quicker reporting, but the change in reporting dates has been halted by a court challenge from trial lawyers.

A large administration package of reform legislation to deal with fraud and abuse has been introduced in the legislature, but industry political analysts suggest it may become a victim of political battling between Republican Gov. George Pataki, who is seeking reelection, and the Democrat-controlled assembly.

According to the IRC, in 2000 the average New York City metro area PIP claim payment was $6,898, compared with $3,295 in the rest of the state.