AN EMPIRICAL ANALYSIS OF NO-FAULT INSURANCE

A cross-sectional study of state loss experiences in 1977 were analyzed to test whether or not states that adopted no-fault automobile insurance laws experienced a reduction in deterrence. The results showed that pure no-fault states, mandatory no-fault states, and compulsory no-fault states experienced increases in their loss ratios of 7.449%, 6.308%, and 3.955%, respectively. Further analysis found that states that adopted no-fault insurance did not have significantly higher loss experiences before the adoption of such laws. Estimates of the cost savings from the adoption of no-fault insurance suggest annual benefits in the range of $28.8 million to $67 million. Employing these estimates to construct a benefit-cost ratio implies a ratio between 1.17 and 1.31. However, such estimates are subject to important qualifications and the conclusion that no-fault automobile insurance is economically efficient is tenuous, at best.

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  • Corporate Authors:

    Sage Publications, Incorporated

    275 South Beverly Drive
    Beverly Hills, CA  United States  90212
  • Authors:
    • Medoff, M H
    • Magaddino, J P
  • Publication Date: 1982-6

Media Info

  • Features: References; Tables;
  • Pagination: p. 373-392
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00385778
  • Record Type: Publication
  • Source Agency: National Highway Traffic Safety Administration
  • Report/Paper Numbers: HS-035 996
  • Files: HSL, TRIS, USDOT
  • Created Date: May 30 1984 12:00AM