Citation

Tyler GR, Hoffer GE. J. Risk Insur. 1973; 40(4): 565-574.

Copyright

(Copyright © 1973, American Risk and Insurance Association, Publisher John Wiley and Sons)

DOI

10.2307/251933

PMID

unavailable

Abstract

Under the Pay-As-You-Drive automobile liability insurance plan, non-commercial vehicle liability insurance premiums would be collected via a gallonage surcharge on gasoline. Additional insurance surcharges would be levied on motorists convicted of moving violations or initiating accidents. (The latter surcharge could be eliminated if the plan were adopted in conjunction with a "no-fault" plan.) These state collected insurance premiums could be allocated by state auction to insurers willing to perform litigative and liability damage claim adjustment and disbursement functions for vehicles garaged in a specific geographic area. The auctioning procedure would be analogous to the present method of allocating state highway construction funds. By essentially eliminating collection-oriented expenses, Pay-As-You-Drive can offer higher coverage at a lower cost than the present system provides. Furthermore, the plan essentially eliminates uninsured and underinsured motorists.