Citation

Todd JD. J. Risk Insur. 1976; 43(3): 431-443.

Copyright

(Copyright © 1976, American Risk and Insurance Association, Publisher John Wiley and Sons)

DOI

10.2307/251911

PMID

unavailable

Abstract

Because potential cost reduction is considered the main selling point of no-fault automobile insurance, several cost predictive studies have been undertaken. This paper examines the methodology and assumptions used in the two principal types of cost prediction systems: projection from tort-based data using appropriate actuarial assumptions and analysis and transference of actual results in states with no-fault laws. Serious limitations and errors are pointed out in several studies. The concept of cost is then analyzed, showing that it tends to be manipulated to serve each user's purposes. Also, at least two factors-plaintiff attorney fees and effects on other insurance-are ignored in most cost studies.