You need to supply more details for us to help you.
What version of Premiere Elements are you using and on what computer operating system is it running?
What is the brand/model/settings for the camera that is producing this .avi file?
There are many kinds of avi files. AVI is just a file extension, a wrapper format, that wraps the video and audio
compression. The video compression can be DV, MPEG4, XviD, MotionJPEG, some examples.
If you have MotionJPEG.avi, the classical remedies are
a. install a utility that came with your camera to supply the required codec
b. install the Morgan MotionJPEG codec (available as a tryout, but will need to be purchased)
c. convert the MotionJPEG.avi to another format that is compatible with Premiere Elements...if SD, DV AVI.
You might even have AVCHD.avi which has compatibility issues with Premiere Elements.
The answers will be in the details. So, looking forward to your follow up with details.
Please check the codecs on your AVI file.
AVI files with H.264 codecs are not supported as a standard video editing format.
You can transcode the file to a different format though & then import into Premiere Elements 12.
If resolution of your issue based on your details dictates a file conversion approach to resolving the problem, then we can supply you with specifics, such as suggested formats to convert to, specific method to convert with, and specific details on how to use that method.
The easiest way to figure out what kind of .avi you have is via brand/model/settings for the camera.
Alternative approaches would be to get a video audio properties readout from free programs such as (assuming Windows)