Pay-at-the-Pump (PAP) proposals call for replacing traditional automobile insurance policies that are linked to multiple risk factors with a new system linked primarily to one--the amount of motor fuel used. PAP insurance would provide a basic package of insurance for private passenger vehicles owned by individuals; however, motorists would still be required to buy supplementary insurance for full collision coverage and protection against theft. Officials trying to enforce mandatory insurance laws at low cost to state governments find PAP proposals attractive. The underlying premise, though, is that vehicle mileage is the principal variable determining accident costs. This research report is organized as follows: 1) What Is PAP Insurance; 2) Why PAP Auto Insurance; 3) Testing the Fundamental Theory Underlying PAP Automobile Insurance; 4) The Causes of Accidents and the Price of Auto Insurance; 5) The Uninsured Motorist Problem; 6) How Much Would PAP Cost; 7) Who Would Gain and Lose Under PAP; and 8) Economic Inefficiencies Likely to Result From a PAP Insurance Plan. The authors draw four major conclusions from the study: 1) PAP proposals are based on a false premise; 2) PAP proposals are not needed to solve the problem of uninsured motorists; 3) PAP proposals incorrectly link promises of large "savings" to paying for insurance at the pump; and 4) PAP proposals are both inequitable and inefficient.

  • Corporate Authors:

    American Petroleum Institute

    1220 L Street, NW
    Washington, DC  United States  20005-4070
  • Authors:
    • Dougher, R S
    • Hogarty, T F
  • Publication Date: 1994-12


  • English

Media Info

  • Features: Appendices; Figures; References; Tables;
  • Pagination: 55 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00730762
  • Record Type: Publication
  • Report/Paper Numbers: Research Study #076
  • Files: TRIS
  • Created Date: Feb 3 1997 12:00AM