Choice No-Fault Insurance: Efficiency and Equity

Abstract

Although slightly more that one-half of the fifty American states require automobile insurers to offer no-fault personal injury coverages (i.e., PIP), many of these states fail to provide any accompanying barrier to tort recovery. In fact, fewer than one-third of all states impose any barrier to recovery, and these barriers invariably take the form of a monetary or verbal threshold’ that must be satisfied before an accident victim can seek recovery for non-economic (pain and suffering) damages. Currently, no state imposes a barrier to third-party recovery for economic damages.

Article Footnote

A “monetary” threshold requires that a victim’s economic damages reach a certain dollar level, whereas a “verbal” threshold requires that a victim’s bodily injuries satisfy a legal standard of “serious” injury