Abstract
The current auto insurance system suffers from numerous shortcomings, and these problems are painfully felt by virtually everyone who buys auto insurance. Excessive and unnecessary fraud, litigation and injury claims have pushed the average insurance premium to more than $774 in 1996. The cost to insure an automobile is rising one-and-one-half times faster than the rate of inflation, outpacing the growth in costs for food, energy, housing, and even medical care.’ Despite more money being paid into the system, however, accident victims with serious injuries are not being fully compensated for their losses. The current system of compensating people through a third-party tort liability system, therefore, results in the worst possible combination: high costs and low benefits.
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Article Footnote
1This chapter originally appeared as a March 1998 publication of the Joint Economic Committee of the U.S.Congress.2 National Association of Insurance Commissioners, State Average Expenditures Premiums for Personal Automobile Insurance in 1996 (Kansas City,MO:NAIC,1998),Table 3;and U.S.Department of Labor,Bureau of Labor Statistics,“Consumer Price Indexes”(1998),on-line at
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Miller, D. (2001). Auto Choice: Impact on Cities and the Poor. In: Lascher, E.L., Powers, M.R. (eds) The Economics and Politics of Choice No-Fault Insurance. Huebner International Series on Risk, Insurance and Economic Security, vol 24. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-1541-8_10
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