No-Fault Automobile Insurance

A Policy Perspective

Stephen J. Carroll, James S. Kakalik, David M. Adamson

ResearchPublished 1991

This report considers what would happen if a state adopted a no-fault auto insurance system. Specifically, it examines (1) how a no-fault plan would affect the costs of compensating for injuries, the amount spent on transactions, the adequacy and equity of injury compensation, and the timeliness of compensation; (2) how the design of the no-fault plan would influence these effects; and (3) how these effects would vary between states. The authors conclude that no-fault can yield substantial savings over the traditional system or it may increase costs, depending on the no-fault plan's provisions and on differences among states in factors that affect the auto-insurance system. They also conclude that no-fault plans reduce transaction costs, align injury compensation more closely with economic loss, eliminate compensation for noneconomic loss for less serious injuries, and generally speed up compensation.

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Document Details

  • Copyright: RAND Corporation
  • Availability: Web Only
  • Year: 1991
  • Pages: 36
  • Document Number: R-4019/1-ICJ

Citation

Chicago Manual of Style

Carroll, Stephen J., James S. Kakalik, and David M. Adamson, No-Fault Automobile Insurance: A Policy Perspective. Santa Monica, CA: RAND Corporation, 1991. https://www.rand.org/pubs/reports/R4019z1.html.
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