It was the often-acknowledged -- and even arguably horrendous -- inadequacy of traditional tort liability as applied to personal injury suffered in automobile accidents that led to the enactment of no-fault insurance laws in many states.[2] Why has no-fault liability also -- at least in the eyes of many -- earned a bad name? And, more importantly, what kind of new reform can we effect to free us form the inadequacies of both tort law and no-fault laws?
In 1991, the RAND Corporation published an appraisal of no-fault laws, being careful to make clear that RAND itself neither supported nor opposed no-fault reforms.[3] As the summary of the RAND study noted, disputes about auto insurance continue to excite debate.[4] Critics of the tort system insist that its costs are too high and that its payments are "inefficient, inequitable, and slow" in compensating injured people.[5] But critics of no-fault laws rebut that the systems that replaced fault-based payments with PIP payments[6] infringed upon fundamental legal rights of victims to recover both economic and non-economic -- principally pain and suffering -- losses from those injuring them, and in any event failed to hold down the costs of automobile insurance.[7]
True reform should involve a fair trade, e.g. making it easier for claimants to be paid promptly but paying them less, as under workers' compensation laws, thereby lowering fortuity, delay and transaction costs.
In this respect, pertinent is a federal bill sponsored on a bipartisan basis and based on ideas advanced by myself and co-authors. (The bill has a rather novel approach to federalism and tort reform which will be discussed at the end.)
By way of background, threshold no-fault plans completely bar entry into the tort system for pain and suffering unless the injured person is at least relatively seriously hurt. That "seriousness" level is sometimes set by verbal descriptions and sometimes by a dollar level of medical expenses which has to be surpassed. "Add-on" no fault plans, on the other hand, allow any person to bring a tort suit for pain and suffering, with the only restriction that one would have to subtract one's no-fault benefits from any tort award. No-fault plans can require a claimant to deduct from one's no-fault benefits amounts one receives from other sources to pay one's medical expenses or lost wages, i.e., one's collateral sources.
It turns out, though, that allowing no-fault benefits plus access to tort suits not only under add-on plans but under threshold plans is very expensive.
The original hope was that no-fault laws would provide compensation to many more accident victims than are paid under traditional tort liability systems, and with faster payments and far lower lawyers' and adjusters' fees, along with not paying for pain and suffering. Thus no-fault insurers could pay more people for less money. But the original no-fault concept has been "undermined" because the system is being used more and more frequently to incur enough health-care costs to allow motorists both to collect no-fault benefits and to trigger a built-in right to sue based on fault about the statutory threshold.
A series of articles by researchers at RAND's Institute for Civil Justice, the University of Virginia Law School, and the Hudson Institute deal with reform of auto insurance. We designated the two prior articles, Maryland One[8] and Maryland Two.[9] All three articles concern allowing motorists to opt out of the status quo by purchasing first-party auto insurance payable without reference to fault for personal injury,[10] coupled with abolition of claims for pain and suffering both by and against them (except for drunken, drugged, or intentional misconduct). All three articles adopt terminology whereby under either a no-fault or add-on system, insurance payable for economic loss without regard to fault is termed personal injury protection (PIP).[11]
Since Maryland Two, RAND has done a further study[12] exposing the flaws inherent in a no-fault system that allows tort claims for noneconomic damages (usually pain and suffering) for claims about a threshold. Because pain and suffering damages are generally calculated as a multiple of medical bills, there is an incentive on the part of an injured claimant to pad those bills.[13] Thus, for every dollar incurred in medical bills, an injured party can receive two, three, or more times as much compensation in pain and suffering damages. Insurance padding is not only lucrative for claimants, who receive several times their economic loss, but also for health care providers (including, and perhaps especially, chiropractors) who receive additional business, and for lawyers who receive their contingent fees out of the pain and suffering component.[14] The new RAND study makes a distinction between "hard" injuries that are objectively verifiable -- for example, the loss of a limb or a fracture detected by an x-ray -- as opposed to "soft" injuries such as sprains and strains, which are not so objectively verifiable.[15] The latter thus present an opportunity to exaggerate an injury's existence or severity. No-fault auto insurance laws in effect in New York and Michigan, more than in other states, have taken much profit out of unnecessary medical bills by virtue of their relatively high verbal thresholds below which claims for pain and suffering are barred.[16] RAND found that in those states seven soft-injury claims are made for every ten hard-injury ones.[17] In Hawaii, where a no-fault law with a dollar threshold provides a greater incentive for exaggerating claims, there are nine soft-injury claims for every ten hard-injury claims.[18] In California, a state without any no-fault law and where the tort system is therefore unimpeded by any barrier to tort claims, twenty-five soft-injury claims are filed for every ten hard ones.[19]
On this score, after Massachusetts amended its automobile no-fault law in 1988 to require a higher threshold of economic damages before tort claims would be allowed, the next year the median number of treatment visits per claim for automobile injuries rose radically from 13 to 30 per claim, or a 131 % increase.[20] Similarly, a study by the Insurance Research Council of 1990 auto tort claims in Hawaii revealed that the median number of treatment visits by claimants to chiropractors was a remarkable fifty-eight, with one-quarter of such claimants having more than eighty-four visits. [21] The graph below from the new 1995 RAND study shows the distributions of medical costs for soft-injury claims in Hawaii and New York. [22] The vertical line in the graph indicates Hawaii's dollar threshold. The average cost of soft-injury claims in both states is adjusted for interstate differences in medical costs and treatment patterns.
As can be seen from the graph, the distribution of medical costs in New York rises quickly, peaks, and then declines sharply to the right. The large majority of soft-injury claims in New York entails relatively small medical costs, with very few such soft-injury claims exceeding Hawaii's threshold. [23]
Hawaii's distribution also rises sharply, flattens out, and then begins to drop off at a relatively low level of medical costs. [24] It then turns up again, rising sharply through the threshold, and then peaks above the threshold before finally falling off.
Thus, a substantial portion of Hawaii's soft-injury claims are for medical costs above its dollar threshold. Compared with New York, with its strong verbal threshold, the distribution of adjusted medical costs in Hawaii shifts substantially to the right, as one would expect given the incentives built into Hawaii's no-fault system. [25] Dollar thresholds, therefore, seem especially fragile compared to verbal ones.
But the key element -- often overlooked by those who urge a New York-type strong verbal threshold as the cure for inadequate no-fault laws -- is that even in New York, claims for pain and suffering above its strong verbal threshold are hugely expensive, contributing disproportionately to auto insurance costs. As discussed in Maryland One,[26] a good measure the propensity for personal injury claims to rise is the change in recent years in the ratio of personal injury (PI) to property-damage claims (PD), that is, the PI-PD ratio. In California, without any no-fault law, that ratio rose steadily from 31.1 PI claims per 100 PD claims in 1980 to 67.2 per 100 in 1992. [27] In New York, on the other hand, with its relatively strong verbal threshold, the PI-PD ratio remained very constant at about 11 per 100 from 1980 to 1989. [28] But as an illustration of the ill effects of PI tort claims even in New York, in the late 1980s studies show that its $50,000 of benefits contributed only 36% of the total pure premiums for PI claims. In other words, the relatively few tort claims preserved over New York's strong verbal threshold contribute disproportionately (64%) to total PI costs. [29] Furthermore, even in New York, experienced plaintiffs' counsel are increasingly exploiting the possibility of suing in tort about the state's relatively high verbal threshold. This activity has led to a recent rise of almost 50% in New York's PI-PD ratio from 1989 to 1992 (from 11 per 100 to 15 per 100). [30] Thus, simply reducing the number of tort claims over a strong verbal threshold fails to net optimal savings.
Even a state like New York, then, while long dealing relatively effectively with the problem of higher costs for smaller claims (an effectiveness, though undercut by recent developments) has long dealt insufficiently with the problem of larger tort claims. The only way to deal with the latter -- while also dealing with the former -- would seem to be the elimination of claims for noneconomic damages in cases both large and small.
But rigorous opposition in state after state to enactment of proposals mirroring New York's law suggests that an even more ambitious plan to eliminate both large and small claims for pain and suffering would not likely pass, particularly over the objections of the trial bar. In other words, the power of opponents of no-fault laws (including consumer advocates such as Ralph Nader who have allied themselves with the trial bar) is such that mandating even an arguably inadequate New York-type law does not seem politically feasible. Indeed, given the size of the margin by which a Connecticut no-fault law was repealed, the legislative route to any mandatory no-fault reform promises very little in Connecticut.
An answer may be ambitious reform beyond even New York's law but which does not force relatively radical change on everybody.
As indicated above, choice reform could give motorists the option of foregoing claims for noneconomic loss, without requiring them to do so. Motorists thus could be given the alternative of purchasing PIP coverage, payable without reference to fault at the compulsory insurance level currently required for liability for bodily injury (e.g. $20,000). Persons electing such PIP coverage could neither sue nor be sued for pain and suffering if involved in accidents with either those who had elected PIP or otherwise. Such PIP motorists would only be allowed to claim in tort against other motorists, whether covered by PIP or otherwise, for economic loss in excess of their PIP coverage. (But, if an injury was caused by a tortfeasor's alcohol or drug abuse, there would be no restriction on the right to sue in tort.) As to accidents between PIP insureds and those electing to stay under the tort system, tort insureds would make a claim against their own insurer for both economic and noneconomic loss (under coverage termed "tort maintenance coverage"),[31] just as they do today under uninsured motorists coverage. Claims for economic loss in excess of one's own tort maintenance coverage would be allowed against PIP insureds. In accidents between two tort liability insureds, the current common law tort system would apply without change.
Some further details: PIP coverage would be in excess of all collateral sources and payable periodically. When claims for economic loss above either PIP or tort maintenance coverages are paid, a reasonable attorney's fee would also be payable. The law applicable to property damage is unchanged by the proposal.
Note that in a state that already has no-fault insurance, the plan would be implemented such that the state's no-fault law would be retained except that, pursuant to the foregoing description, rights to claim for noneconomic loss above the threshold would be waived, with corollary reliance on tort maintenance coverage by those who stay in the tort system.
Estimates by RAND indicate average minimum savings in total auto insurance premiums of more than 30 percent for motorists who choose the new coverage. Savings for lower-income motorists would be close to 50 percent. Costs for motorists who elect to remain with fault-based coverage would be affected only minimally by the adoption of a choice plan. If 100 percent of insured drivers switched to the new coverage, annual premium savings across the country would have exceeded $40 billion in 1996, according to estimates of the Joint Economic Committee of the U.S. Congress, extrapolating from 1993 estimates by RAND. (See Appendix for tables, including a state-by-state chart of projected savings.) The choice plan is incorporated in federal legislation proposed by then-Senator Bob Dole (R.-Kan.) and incumbent Senators Mitch McConnell (R.-Ky.), Daniel P. Moynihan (D-N.Y.) and Joseph Lieberman (D-Conn.).
If you just listened to the candidates [jockeying] for election in November, you would easily think that the only issue of importance is crime because all the candidates talk about is who will be the "toughest" on criminals.
There is one issue that impacts more Philadelphians than all of the crimes committed in any given month and that is the (criminal) auto insurance rates Philadelphians are FORCED to pay simply because they live within the city.
Because state law mandates that all motor vehicle owners must have insurance to drive those vehicles and because many Philadelphians are required to pay auto insurance rates far in excess of the value of the vehicles they drive, many Philadelphians are committing a crime because they are driving without the legally required auto insurance.
Curiously, none of these tough on crime candidates is addressing the issue of . . . auto insurance rates which [have] turned thousands of otherwise law abiding Philadelphians into criminals. Many city residents see a better option in becoming petty criminals than impoverishing themselves by paying the highest auto insurance rates in the nation.
Candidates need to get real and use their clout to assist reforming auto insurance laws which force decent citizens to become ciminal. [32].
This situation exists to a substantial degree in every American community, large and small. Currently, less affluent motorists (if they insure at all) can pay over 30% of their annual household income on auto insurance, impeding their buying such necessities as food or shelter. A recent study of low-income insured motorists in Maricopa County, Arizona, found that 44% were forced at some point to postpone buying food in order to pay their auto insurance premium. [33]
Furthermore, the poor may also pay substantially more in absolute terms because so many of them live in urban areas where typical personal auto insurance premiums are much higher than in suburban and rural areas. In 1994, the average annual premium charged by one California insurer for minimum liability coverage in Los Angeles was $811; the same coverage in Northridge came to only $578. For Wisconsin the 1994 average was $367 in Milwaukee, but $213 in Waukesha. [34]
Note also that under the tort system an insurance company, in rating its own insureds, only considers whether they are likely to be involved in an accident, not what they would be paid once an accident occurs. A liability insurance company, in setting premiums, knows it will not pay its own insured but rather the unknown persons its insureds may negligently injure in a future accident. The poor therefore pay very high premiums even though by definition they surely incur less wage loss (and probably less medical expenses) compared to others. It is as though one was charged for fire insurance based only on the likelihood of fire but not on the value of one's house. Under auto insurance, then, at a given level of coverage, the poor must pay into the insurance pool the same as the rich even though they will extract much less from the pool. Keep in mind, too, that the poor are less likely to pursue a tort claim. According to legal sociologist H. Lawrence Ross:
[T]ort law in action may ... be termed inequitable. It is responsive to a wide variety of influences that are not defined as legitimate by common standards of equity. The interviews and observations I conducted convinced me that the negotiated settlement rewards the sophisticated claimant and penalizes the inexperienced, the naive, the simple, and the indifferent. Translating these terms into social statuses,, I believe that the settlement produces relatively more for the affluent, the educated, the white, and the city-dweller. It penalizes the poor, the uneducated, [the African American and the rural dweller] .... [35]
Tort law's adversarial basis also disadvantages lower income drivers in another sense: such drivers are often without resources to temporarily tide themselves over after an accident and are thus often compelled under tort law to accept low settlements because of their need for immediate payment. When the poor are involved in suit, however, there is reason to believe that they are especially vulnerable to the schemes of illicit lawyers, doctors, and chiropractors to pad claims and even stage accidents. [36]
Thus, community leaders of minority and low-income groups are likely to favor this proposal. In 1989, when a proposal was made to allow such groups to buy a low-benefit first-party auto insurance policy, eliminating payment for pain and suffering, the Los Angeles Times described the situation as follows:
For the first time since he intervened in California's "war of initiatives" over auto insurance [in 1988], consumer advocate Ralph Nader is having his views questioned by some of the consumer, minority and low-income groups that are most committed to lowering insurance prices.
At an unannounced meeting with Nader in Sacramento . . . , representatives of a coalition of these groups who are backing a proposal for a no-frills ... insurance policy to be sold across the state for $160 to $200 challenged his opposition to [such] insurance.
People who described the meeting said it was a polite but spirited exchange during which Nader and [his ally] Harvey Rosenfield ... were criticized for aligning themselves with the California Trial Lawyers Assn....
Those present at the meeting from the minority and consumer side -- including Mario Obledo, national chairman of the Rainbow Coalition, John Gamboa, executive director of the Latino Issues Forum, George Dean, president of the California Council of Urban Leagues, and Harry Snyder, West Coast director of the Consumer [sic] Union -- declared that they saw no [other] way of making auto insurance affordable to the poor....
Nader responded that by giving up rights to file lawsuits and seek pain and suffering compensation, people insured under the no-fault proposal would become victims of a "two-class auto insurance system" under which rich policy holders would have more ability to recover damages from accidents than the poor.
"Why should we give up pain and suffering awards?" Nader asked in a subsequent interview. "The trouble with the minority groups is that ... [t]hey accepted the principle that if they were poor, they'd have to get compensated for just medical benefits and wage losses, not pain and suffering . . . ."
Dean of the Urban League told The Times. . . "we estimate there are 5 million drivers who can't afford and don't have insurance now .... I remember saying to Ralph myself that I know he has been a hero for the consumer in many instances, but I think he is wrong on this particular issue," said Dean. "We're trying to come up with something affordable that will allow the people who are our constituency -- the low-income people in this state -- to drive legally and not break the state's mandatory insurance law. That's our bottom line."
Obledo said he had told Nader that 5 or 6 million Californians cannot afford auto insurance. "Some of his points ... are meritorious," he said of Nader, "but we're in a situation here that we had to come up with a plan that provides insurance for the lowest cost." Edith Adame, counsel to the Latino Issues Forum, said . . . "We understand [Nader's] a man of principle, but in this case about 6 million people are going to be sacrificed for the principle. If he were in our boat, he would probably do the same thing we're doing (proposing a no-frills policy)."
The Consumer [sic] Union's Snyder said he felt the meeting had succeeded in making Nader and Rosenfield "realize that is they are going to kill a low-income solution, they have to come up with one that's at least as good." So far, he said, "Nader's theology makes each accident a meal ticket for the trial lawyer." [37]
Other important segments of the consumer movement have broken with Nader and the trial bar in calling for systematic reform of the auto tort system, based on what they see as tort law's, anti-consumer character. A report by the National Insurance Consumer Organization, an organization closely associated with Ralph Nader that generally defends the tort system, breaks with Nader in describing the pain and suffering component of automobile tort law as a "dream of a huge reward ... [that] is, for almost all, only a dream. And whatever large sums are awarded are heavily taxed by the lawyers.... On economic grounds it's a bad buy...." [38]
Will substitution of PIP coverage for traditional tort liability lessen the deterrent effect that traditional tort liability has on unsafe conduct, thereby increasing costs? RAND's calculation assume no such effect. In support of that conclusion, substituting PIP for tort liability will create offsetting incentives. [39] For example, negligent motorists will absorb or "internalize" less of their loss than under traditional tort law because they recover even if they cause accidents and they will not be liable for pain and suffering. Conversely, those same motorists will internalize more costs because they cannot recover for their own pain and suffering.
Quite apart from the effects of insurance in muting motorists' responsibility for careless conduct under traditional tort liability, unsafe driving is not deterred by a single influence; rather it is affected by a combination of criminal, civil, and tort sanctions, and, arguably above all, by one's interest in preservation of one's own body and property. [40] Thus, under PIP, all elements of deterrence but one remain unchanged, and even the influence of civil sanctions are transformed but not eliminated. Finally, as indicated below, by reducing the relative cost of driving safer cars the plan should, at the margin, necessarily increase the use of such safer cars. Thus, the plan should generate affirmative market incentives that should, in turn, enhance the overall safety of driving automobiles. [41]
Another potential advantage might be mentioned under a first-party system whereby both those who choose traditional tort coverage as well as those who choose PIP coverage are paid by their own insurers. In their book, The Struggle for Auto Safety, authors Jerry Mashaw, a Yale law professor, and David Harfst, a Washington, D.C., lawyer, tell what they deem the sad but edifying tale of the ineffectiveness of the command and control regime instituted by the National Highway Traffic Safety Administration (NHTSA), the agency charged by Congress with regulating the safety of automobiles. [42] They contend that NHTSA has been increasingly enmeshed in prolonged administrative proceedings, experiencing massive reversals by the federal courts and a Congress that has apparently abandoned its commitment to the initial ideals of the Act. [43] According to their exhaustively documented view, in the wake of judicial and legislative assaults on the agency's original statutory mandate for air bags and other injury-preventing devices, NHTSA has shifted its focus from regulation by rule-making, which is difficult to justify before skeptical judges and legislators, to regulation by recall of defective vehicles, which is relatively easy to get everyone to understands -- a shift that continues to the present day, with highly deleterious results. Since the early 1970s, Mashaw and Harfst argue, NHTSA has adopted few if any new safety standards, while the number of mandatory recalls of cars with unsafe features has escalated dramatically. [44] But despite the number of recalls, they cite empirical evidence that indicates that the effect of recalls on enhanced safety is trivial, perhaps on the order of less than 1.5 percent in reduction of deaths and injuries. [45]
While not ignoring, the difficulties involved, Mashaw and Harfst in their final chapter suggest that a better prospect for achieving vehicle safety may lie in a movement towards first-party insurance of the type suggested herein. [46] Such a movement could provide an effective extra incentive -- reduced auto insurance rates -- for motorists to purchase cars that reduce their own accident costs. The prospect for such an incentive is clearly attenuated under traditional tort third-party liability insurance, in which the lessening of insurance payouts from the greater auto safety accrues not to an insurer's own insureds but to negligent third parties whose liabilities are correspondingly reduced when colliding with an insurer's own insureds. Because the benefits of increased safety do not accrue to them, there is no way for insurers to reward their own insureds for installing injury-reducing devices. With first-party insurance, however, whether PIP or tort maintenance coverage, the situation changes dramatically. Under such a system, an insurer can reduce premiums for safer cars, secure in the knowledge that the savings from injury-reducing devices will accrue to its own insureds and not to third-parties unknowable in advance. [47]
In sum, the merits of allowing motorists to opt out of payment for pain and suffering and other noneconomic loss, in return for lower costs and receipt of automatic payment for economic loss, are worthy of consideration in every state. [48]
Note: This material is compiled from several pieces by the author (two with co-authors) including those found in 1 Mich. L. & Pol. Rev. 111 (1996); 52 Md. L. Rev. 1016 (1993); 54 Md. L. Rev. 281 (1995); 55 Md. L. Rev. 160 (1996); and 1 Conn. Ins. L. J. 33 (1995).
1. Stephen K. Yoder, Insurance Regulator in California Woos Voters, Bashes Firms, Wall St. J., Aug. 10, 1992, at 1.
2. Stephen J. Carroll et al., No-Fault Approaches to Compensating People Injured in Automobile Accidents 7-9 (RAND Institute for Civil Justice 1991). "Fifteen states," stated RAND in 1991, "now have a no-fault plan that includes some form of tort threshold that limits access to the liability system" Id. But see infra note 22.
3. See Stephen J. Carroll & James S. Kakalik, No-Fault Automobile Insurance: A Policy Perspective (RAND Institute for Civil Justice 1991).
4. Id. at vii.
5. Id.
6. Insurance payments that do not take account of fault are usually termed personal injury protection or personal protection insurance payments, in either case commonly nicknamed "PIP."
7. Carroll & Kakalik, supra note 4, at vii.
8. Jeffrey O'Connell et al., Consumer Choice in the Auto Insurance Market, 52 Md. L. Rev. 1016 (1993) [hereinafter Maryland One].
9. Jeffrey O'Connell et al., The Costs of Consumer Choice for Auto Insurance in States Without No-Fault Insurance, 54 Md. L. Rev. 281 (1995) [hereinafter Maryland Two]. Additional articles are a distinct possibility as further updated data become available.
10. This Article defines a no-fault law as one that mandates the purchase of auto insurance payable by one's own insurer for economic loss without reference to fault, and that also precludes accident victims from recovering noneconomic damages in tort unless they can prove another person was at fault and their losses exceed a threshold defined by the no-fault law. Such no-fault laws are distinguished from "add-on" laws, which similarly require insurers to pay their own injured insureds for economic losses without regard to fault, but do not limit the right of injured parties to claim for noneconomic loss above any threshold.
11. In some states, such coverage is termed personal protection insurance, also commonly termed "PIP".
12. Stephen Carroll et al., RAND Institute for Civil Justice, The Costs of Excess Medical Claims for Automobile Personal Injuries (1995).
13. Id. at 5-6.
14. Charles Worlfram, Modern Legal Ethics 528 n. 1 (1986).
15. Carroll et al., supra note 12, at 10.
16. See supra note 2.
17. Carroll et al., supra note 12, at 13.
18. Id.
19. Id.
20. Sarah S. Marter & Herbert I. Weisberg, Medical Expenses and the Massachusetts Automobile Tort Reform Law: A First Review of 1989 Bodily Injury Liability Claims, 10 J. Ins. Reg. 462, 488; tbl. 12 (1992). Even for fracture treatments, health care visits increased in 1989 by 50% following the higher no-fault threshold law.
21. Insurance Research Council, Automobile Claims in Hawaii 2, 16-27 (May 1991).
22. Carroll et al., supra note 12, at 15.
23. Id.
24. Note that the horizontal axis is a logarithmic scale: Equal intervals indicate equal percentage differences. Id.
25. Id. For a report on a Hawaii no-fault auto bill that would have abolished both large and small claims for noneconomic loss (with no choice of retaining tort coverage in place of PIP benefits) but was vetoed by the governor, see Alfted Haggerty, Hawaii Legislature Lets Veto of Pure No-Fault Stand, Nat'l Underwriter (Property & Casulty/Risk & Benefit Management ed.), July 10, 1995, at 2.
26. Maryland One, supra note 8, at 1019-20.
27. Insurance Research Council, Trends in Auto Bodily Injury Claims, app. A, tbl. A-6 (2d ed. 1995) [hereinafter IRC].
28. Id. at tbl. A-34.
29. See Maryland One, supra note 8, at 1019-20.
30. IRC, supra note 44, at tbl. A-24.
31. On the controversial philosophical question of whether it is necessary for tort payments to be made by, or even on behalf of, tortfeasors (by their insurers, for example), see Symposium, Corrective Justice and Formalism: The Care One Gives One's Neighbors, 77 Iowa L. Rev. 443-44, 445, 672-74, 677, 698-99, 703-04. See also Jules Coleman, Risks and Wrongs 303-28, 361-406 (1992).
32. Candidates Should Address High Auto Insurance Rates, Phil. Trib., Oct. 21, 1994, at A6.
33. Robert Lee Maril, The Impact of Mandatory Auto Insurance Upon Low Income Residents of Maricopa County, Arizona 8-9 (1993) (on file with Connecticut Insurance Law Journal).
34. Data supplied by State Farm Insurance Company (on file with author).
35. H. Lawrence Ross, Settled Out of Court: The Social Process of Insurance Claims Adjustments 241-42 (1970). Consider the following table from the largest study of payment to auto accident victims, done in the 1960s:
Reprinted from U.S. Dep't. of Transp., Economic Consequences of Automobile Injuries 54, tbl. 3.25 (1970) (Automobile Insurance and Compensation Study). The "compensation received" figures included both tort and nontort sources, with "[a]bout one-third of recovery [for bodily injury and property damage] from tort." Id. at 2.
36. See, e.g., Alfred Haggerty, Insurer Gears Up to Brake Phony Auto Accident Scams, Nat'l Underwriter (Prop. & Cas. ed.) July 27, 1984, at 2: The Accident Swindlers, Chi. Sun-Times, Feb. 10-24, 1980, passim.
37. Kenneth Reich, Nader Draws Criticism by Consumer for No-Fault View, L. A. Times, May 29, 1989, at A3.
38. Pay-At-The-Pump: Private No-Fault Auto Insurance ii (a proposal by the National Insurance Consumer Organization, on file with Connecticut Insurance Law Journal); see also Andrew Tobias, Auto Insurance Alert! 57-58 (1993).
39. See Richard A. Epstein, Automobile No-Fault Plans: A Second Look at First Principles, 13 Creighton L. Rev. 769, 785 (1980) (arguing that "[a]ny shift in the various rules of liability ... will create offsetting incentives"). See also O'Connell et al., supra note 1, at 1040-41 (arguing in accord with the text at supra note 24 that under first party insurance, such as PIP, insurers can create incentives when they offer lower premiums for safer cars because the savings accrue to their insureds and not to third parties). See generally O'Connell & Joost, supra note 7, at 87 n. 72 (discussing the effect of a choice system on unsafe driving). But see Gary Schwartz, Reality in the Economic Analysis of Tort Law: Does Tort Law Really Deter?, UCLA L. Rev. 377, 393-97 (1994).
Endnotes
Relationship Of Family Income to Serious Injury and [Automobile] Fatality
Cases, to Retention of Counsel, and to Reparations [Compensation] Received.
(Contact the JEC for a copy of this table.)
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