Cost Implications of No-Fault Automobile Insurance.

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Daniel T. Winkler, Professor (Creator)
Joseph E. Johnson, Professor Emeritus (Contributor)
The University of North Carolina at Greensboro (UNCG )
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Abstract: No fault advocates commonly predict automobile insurance cost savings for consumers in states adopting no-faults statutes in place of a tort system. For states implementing no-fault, the cost results have been mixed. This study compares the loss costs of no-fault from 1974 through 1985. Not surprisingly, the findings suggest that the bodily injury liability loss costs were lower on average in no-fault states than in tort states after controlling for the influence of wages, population density, and the presence of comparative negligence. However, total bodily injury related costs were not significantly lower on average in no-fault states, and they were significantly higher in states with compulsory add-on laws and to a lesser extent in states with high tort thresholds. Whether the lack of estimated cost savings on average in no-fault states in attributable to selection bias or not, the causes of this result are important issues for further research.

Additional Information

The Journal of Risk and Insurance, March 1992, pp. 116-123
Language: English
Date: 1992
Cost implications, No-fault automobile insurance, Tort system

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