The Effect Of Automobile Insurance And Accident Liability Laws On Traffic Fatalities

This article reports on a study that investigated the incentive effects of automobile insurance, compulsory insurance laws, and no-fault liability laws on driver behavior and traffic fatalities. The authors analyzed a panel of 50 U.S. states and the District of Columbia for 1970-1998, a period in which many states adopted compulsory insurance regulations and/or no-fault laws. Using an instrumental variables approach, the authors found evidence that automobile insurance has moral hazard costs, leading to an increase in traffic fatalities. In addition, reductions in accident liability produced by no-fault liability laws have led to an increase in traffic fatalities (estimated to be on the order of 6 percent). Overall, these results indicate that, whatever other benefits they might produce, increases in the incidence of automobile insurance and moves to no-fault liability systems have significant negative effects on traffic fatalities.

  • Availability:
  • Authors:
    • Cohen, Alma
    • Dehejia, Rajeev
  • Publication Date: 2004-10


  • English

Media Info

  • Media Type: Print
  • Pagination: pp 357-393
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 01010609
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Nov 12 2005 6:47AM