Citation

Carroll SJ, Kakalik JS. J. Risk Insur. 1993; 60(2): 265-287.

Copyright

(Copyright © 1993, American Risk and Insurance Association, Publisher John Wiley and Sons)

DOI

10.2307/252907

PMID

unavailable

Abstract

This study estimates the effects of a broad range of alternative no-fault auto insurance plans, compared with the traditional tort system. A simulation model relating accident victims' injuries and losses to their expected auto insurance compensation under a specified no-fault plan is applied to a representative sample of auto accident victims in the tort states. Their estimated compensation under each of several no-fault alternatives is then compared to their actual compensation. The results indicate that no-fault can yield substantial savings over the traditional system, or may increase costs substantially, depending on the no-fault plan's provisions. Regardless of plan provisions, all no-fault plans reduce transaction costs, match compensation more closely with economic loss, reduce the amounts paid in compensation for noneconomic loss to less seriously injured people, and speed up compensation.