Legislators and consumer groups in Michigan have recently proposed a number of reforms designed to reduce the costs of auto insurance in the state. In this paper, the author examines how auto-crash claiming patterns in Michigan differ from those in other states and considers how these differences might affect consumer costs. It shows that the fact that premiums are higher in Michigan than in other states can be explained by higher levels of reimbursement provided to injury victims and their medical providers. This pattern suggests that reforms that change claiming behavior may have considerable potential for lowering auto premiums in Michigan.
The research described in this report was conducted by the RAND Institute for Civil Justice.
This report is part of the RAND Corporation occasional paper series. RAND occasional papers may include an informed perspective on a timely policy issue, a discussion of new research methodologies, essays, a paper presented at a conference, or a summary of work in progress. All RAND occasional papers undergo rigorous peer review to help ensure that they meet high standards for research quality and objectivity.
Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.