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2001 | Buch

An Introduction to Choice No-Fault Kapitel lesen Erstes Kapitel lesen

The Economics and Politics of Choice No-Fault Insurance

herausgegeben von: Edward L. Lascher Jr., Michael R. Powers

Verlag: Springer US

Buchreihe : Catastrophe Modeling

Enthalten in: Professional Book Archive

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Über dieses Buch

In recent years, choice no-fault has emerged as a popular but controversial proposal for addressing the problem of high automobile insurance rates. Choice plans offer consumers the option of a lower-cost insurance policy with restrictions on filing lawsuits or a higher-cost policy with full tort rights. Some American states have implemented choice programs, and major federal choice legislation is now pending in the United States Congress.
Choice no-fault has caught the attention of policy makers, the insurance industry, and academics. Until now, however, no single book has pulled together the available research on the topic. The Economics and Politics of Choice No-Fault Insurance fills that gap. Edited by scholars from different disciplines, each of whom has written extensively on automobile insurance issues, the book includes some of the best work in the area. Former Massachusetts Governor and presidential candidate Michael S. Dukakis wrote the foreword.
Contributors include University of Virginia Law Professor Jeffrey O'Connell, widely considered the `father of no-fault,' as well as authors of the influential RAND study of the potential effects of choice no-fault on insurance rates. The book chapters, most of which were written especially for this volume, cover topics ranging from the impact of choice no-fault on accidents and driving behavior, to the effects of choice on medical care usage, to alternative approaches for resolving accidents involving both `no-fault' and `tort' electors, to the political feasibility of choice legislative proposals. Emphasis on the potential advantages of choice no-fault is balanced by consideration of possible ill effects.

Inhaltsverzeichnis

Frontmatter
1. An Introduction to Choice No-Fault
Abstract
“Choice” no-fault automobile insurance refers generally to any automobile accident recovery regime in which individuals purchasing automobile insurance policies are afforded a choice between traditional tort recovery on the one hand, and some variant of no-fault, with a barrier to tort recovery, on the other. Currently, only three jurisdictions in North America Kentucky, New Jersey, and Pennsylvania offer insureds some form of choice system. However, choice no-fault has received considerable attention from academics at least since the publication of a seminal 1986 law review article by Jeffrey O’Connell and Robert H. Joost (see O’Connell and Joost, 1986). Furthermore, since 1997, legislation has been pending in both Houses of the U.S. Congress to provide a federal mandate for choice no-fault. Under this plan, each state would be strongly encouraged to offer insureds a no-fault alternative to traditional tort recovery. Additionally, over the past 10 years, legislatures in several states (e.g., Rhode Island) have given serious consideration to bills aimed at establishing choice systems.
Edward L. Lascher Jr, Michael R. Powers
2. Choice No-Fault Insurance: Efficiency and Equity
Abstract
Although slightly more that one-half of the fifty American states require automobile insurers to offer no-fault personal injury coverages (i.e., PIP), many of these states fail to provide any accompanying barrier to tort recovery. In fact, fewer than one-third of all states impose any barrier to recovery, and these barriers invariably take the form of a monetary or verbal threshold’ that must be satisfied before an accident victim can seek recovery for non-economic (pain and suffering) damages. Currently, no state imposes a barrier to third-party recovery for economic damages.
Edward L. Lascher Jr, Michael R. Powers
3. The Effects of Choice Auto Insurance on Costs and Compensation
Abstract
In 1999, bills that would establish a choice auto insurance plan in all states were introduced in both the U.S. Senate (S. 837) and the U.S. House of Representatives (H.R. 1475). These bills would establish an auto insurance plan in every state under which consumers are given a choice between a modified version of their state’s current insurance system (MCS) and an absolute no-fault (ANF) plan.’ This analysis uses data for a representative sample of auto accident victims whose claims were closed in 1997 to estimate the effects of a choice automobile insurance plan that embodies the basic principles of the plans being considered in Congress. However, because of data limitations, we do not consider certain provisions of those plans. These are noted below.
Stephen J Carroll, Allan F Abrahamse
4. The Case Against Auto Choice
Abstract
To consider wrongs as merely incidental to remedies; to inquire for what injuries a particular action may be brought, instead of explaining the injuries themselves, and then asking what action may be brought for their redress; seems to me to reverse the natural order of things
Brent Kabler
5. The Effect of No-Fault Auto Insurance on Driver Behavior and Auto Accidents in the United States
Abstract
Proponents of no-fault auto insurance claim the system delivers speedier and more equitable compensation at lower cost than traditional tort insurance (e.g., O’Connell, et al., 1996). A similar case is made in favor of choice auto insurance (Carroll and Abrahamse, 1999). However, the essential property of no-fault and choice auto insurance that proponents argue may reduce auto insurance costs restricted third-party liability is considered to be among its greatest weaknesses by opponents. Opponents commonly focus their case against no-fault and choice on the basis that individuals should be held accountable for their negligent actions (e.g., Kabler, 1999). This, they argue, provides redress for those injured and, importantly, serves to deter negligent actions overall. No-fault insurance, they reason, significantly weakens this deterrent effect, leading to more negligent driving, higher accidents rates, and ultimately higher auto insurance costs.
David S. Loughran
6. Auto Insurance Claims in New Jersey and Pennsylvania
Abstract
Since the introduction of the automobile to modern American society, accidents and their resulting costs have been a source of concern. Naturally, horse-and-buggy, train, boat, and other transportation-related accidents preceded those of the automobile, offering ideas for the proper treatment of auto accident costs. Yet, no prior form of travel had as widespread an effect on the human social structure as did the automobile. The car ultimately touched the lives of all Americans. By the start of the twenty-first century, approximately one in every two Americans owned a car, resulting in over six million automobile accidents and 41,000 deaths annually on U.S. roads and highways.
Jia-Hsing Yeh, Joan T. Schmit
7. Determinants of The Selection of Full or Limited Tort Auto Insurance in Pennsylvania: an Empirical Analysis
Abstract
In response to rapidly rising insurance prices, Pennsylvania was one of several states to adopt no-fault auto insurance in the 1970s. The Pennsylvania no-fault law, passed in 1975, included a $750 monetary tort threshold and unlimited no-fault medical benefits. However, because of the easily reached tort threshold, the new law failed to stabilize costs; and so, in 1984 the legislature acted again, this time repealing the tort threshold, while leaving in place an “add-on” system of no-fault “CAT Fund” benefits capped at $1,000,000 (see Powers, 1989).
Laureen Regan
8. Giving Motorists a Choice between Fault and No-Fault Insurance
Abstract
Since insurance ranks right up there with photosynthesis on the ho-hum scale, the only way to muddle through this controversy is to inject a little drama into it. Don’t think of auto insurance as auto insurance. Think of it as a prize fight. A real knock-down, drag-out marathon slugfest. In one corner is “Killer” Tort, the slow-footed, hard-punching veteran who represents the “you-smashed-into-my-car-and-now-I’m-going-to-sue-yourpants-off’ old school of claims settlement. His opponent is ”Kid“ No-fault, a quick-moving young challenger who has never quite lived up to his potential. The ”Kid“ takes the gentlemanly approach to all accidents: Why get uptight about who’s at fault? Let’s just get the bills paid and the cars on the road.
Jeffrey O’Connell, Robert H. Joost
9. Equity in Automobile Insurance: Optional No-Fault
Abstract
Throughout the past decade, automobile insurance premiums have escalated in many jurisdictions. Excessive litigation and the over-utilization of medical services have been primary forces pushing the price of automobile insurance beyond the reach of many consumers. Nationally, automobile insurance premiums increased an average of 9.6 percent annually, about three times the average rate of increase in the Consumer Price Index, from 1982 through 1988 (see A. M. Best Company, 1990). In Pennsylvania, where major automobile insurance reform has been enacted recently, the rate of increase was almost identical to the national average during this period of time.
Michael R. Powers
10. Auto Choice: Impact on Cities and the Poor
Abstract
The current auto insurance system suffers from numerous shortcomings, and these problems are painfully felt by virtually everyone who buys auto insurance. Excessive and unnecessary fraud, litigation and injury claims have pushed the average insurance premium to more than $774 in 1996. The cost to insure an automobile is rising one-and-one-half times faster than the rate of inflation, outpacing the growth in costs for food, energy, housing, and even medical care.’ Despite more money being paid into the system, however, accident victims with serious injuries are not being fully compensated for their losses. The current system of compensating people through a third-party tort liability system, therefore, results in the worst possible combination: high costs and low benefits.
Dan Miller
11. More for Less Under Auto Choice
Fewer Dollars for Lawyers, Fraud, Pain and Suffering, and Insurance Companies Mean Lower Premiums and Better Compensation for Motorists
Abstract
Opponents of the federal Auto Choice Reform Act’ contend that any premium savings the legislation would produce would come at too great a price–the loss of benefits for injured people. If that were truly the case, then the opponents would have a legitimate argument. In fact, there is so much waste in the present system that the personal injury protection (PIP) reform option of Auto Choice, by eliminating the waste, can provide both dramatically lower premiumsandbetter compensation of economic loss, primarily medical bills and lost wages.
Peter Kinzler, Jeffrey O’Connell
12. The Political Feasibility of Choice No-Fault Insurance
Abstract
Much of this book addresses the following two questions: (1) How does choice no-fault insurance work? and (2) What are the effects of choice no-fault under different design arrangements? These are crucial issues. Yet given how frequently even well supported automobile insurance reform efforts have collapsed in the political realm, those concerned about real-world public policy may find the following question equally important: (3) What is the political feasibility of moving to a choice no-fault system?
Edward L. Lascher
Backmatter
Metadaten
Titel
The Economics and Politics of Choice No-Fault Insurance
herausgegeben von
Edward L. Lascher Jr.
Michael R. Powers
Copyright-Jahr
2001
Verlag
Springer US
Electronic ISBN
978-1-4615-1541-8
Print ISBN
978-0-7923-7467-1
DOI
https://doi.org/10.1007/978-1-4615-1541-8