The Effects of Choice Auto Insurance on Costs and Compensation

Published in: The Economics and Politics of Choice No-Fault Insurance (Huebner International Series on Risk, Insurance and Economic Security) / Edited by Edward L. Jr. Lascher, Michael R. Powers (Norwell, MA.: Kluwer Academic Publishers, 2001), p. 31-66

Posted on RAND.org on January 01, 2001

by Stephen J. Carroll, Allan Abrahamse

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. CONCLUSION: Results suggest that the choice plan can offer dramatically less expensive insurance to drivers willing to give up access to compensation for non-economic loss with little actual effect on those who want to retain access to compensation for both economic and non-economic loss.

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