The Effects Of A Choice Automobile Insurance Plan On Insurance Costs And Compensation: An Analysis Based On 1997 Data,Used

The Effects Of A Choice Automobile Insurance Plan On Insurance Costs And Compensation: An Analysis Based On 1997 Data,Used

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Choice auto insurance gives drivers the option of selecting either a somewhat modified version of their state's current auto insurance plan or a nofault plan. Using the same analytical methods as in their two previous studies on the same subject (MR540ICJ, based on 1987 data; and MR970ICJ, based on 1992 data), the authors estimated the effects of a choice automobile insurance plan on the costs of compensating auto accident victims. They find the choice plan can deliver on its promise of offering dramatically less expensive insurance to drivers who are willing to give up access to compensation for noneconomic loss by purchasing nofault insurance, with little effect on those who want to retain access to compensation for both economic and noneconomic loss. If insurers pass on cost savings, the adoption of a choice plan could translate into savings on total premiums of about 23 percent for purchasers of nofault insurance. Because claims behavior has varied

⚠️ WARNING (California Proposition 65):

This product may contain chemicals known to the State of California to cause cancer, birth defects, or other reproductive harm.

For more information, please visit www.P65Warnings.ca.gov.

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