This study estimates the effects of offering drivers in each state a choice between their state's current insurance system and an absolute no-fault plan in which motorists neither recover nor are liable for noneconomic loss for any accident injury. If insurance premiums are proportional to compensation costs, drivers in the tort states who choose absolute no-fault should save about 60 percent on their premiums for personal injury coverage. Drivers in the current no-fault states who elect absolute no-fault should save roughly 33 to 50 percent on their personal injury costs. Drivers who choose to stay in their state's current insurance plan will generally realize some savings.
Originally published in: CPCU Journal, v. 51, no. 1, Spring 1998, pp. 19-39.
This report is part of the RAND Corporation Reprint series. The Reprint was a product of the RAND Corporation from 1992 to 2011 that represented previously published journal articles, book chapters, and reports with the permission of the publisher. RAND reprints were formally reviewed in accordance with the publisher's editorial policy and compliant with RAND's rigorous quality assurance standards for quality and objectivity. For select current RAND journal articles, see External Publications.
Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/research-integrity.
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.