No-fault auto insurance opponents frequently argue that no-fault may ultimately lead to higher auto insurance costs by reducing drivers' incentives to drive carefully and thereby increasing the accident rate. The intuition behind this criticism of no-fault is simple: No-fault auto insurance lowers the cost of driving negligently by limiting first-party liability for the injuries suffered by third-parties in auto accidents. This book evaluates this criticism of no-fault by examining trends in fatal and non-fatal automobile accidents rates and rates of driver negligence in the United States between 1967 and 1989. Contrary to some earlier research, the author finds no evidence that the adoption of no-fault auto insurance between 1971 and 1976 in 16 states increased fatal accident rates in those states. This book also finds no correlation between the presence of no-fault auto insurance and a state's overall accident rate or rate of driver negligence.
From the Publisher
The RAND Institute for Civil Justice has been conducting research on auto insuranceissues since its inception in 1979.A large proportion of these studies have focused on the effectsof a no-fault or choice system on the costs of compensating individuals for injuries sustained inautomobile accidents.This report looks at the policy question of no-fault automobile insurance from a differentangle:It investigates the possibility that no-fault auto insurance lowers the incentive to drivecarefully and so increases accident rates along with the cost of insurance.This report will be ofinterest to consumer advocates,the insurance industry,policymakers,and others concerned withauto insurance policy.Contrary to some earlier research,this report finds no evidence that U.S.states ' adoptionof no-fault auto insurance between 1971 and 1976 increased their fatal accident rates.The reportalso finds no correlation between the presence of no-fault auto insurance and a state 's overallaccident rate or rate of driver negligence.The author concludes that while reasons may exist tooppose the concept of no-fault auto insurance,its effect on driver behavior and accidents shouldnot be among them.For more information about the Institute for Civil Justice,contact:Alan F.Charles,DirectorRAND Institute for Civil JusticeRAND1700 Main StreetSanta Monica,CA 90407-2138TEL:(310)393-0411 x7091FAX:(310)451-6979Email:icj@rand.
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