Skip to main content
SpringerLink
Log in

Auto Choice: Impact on Cities and the Poor

  • Chapter
The Economics and Politics of Choice No-Fault Insurance

Part of the book series: Huebner International Series on Risk, Insurance and Economic Security ((HSRI,volume 24))

  • 92 Accesses

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.

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

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Abrahamse, Allan F., and Stephen J. Carroll, 1995The Effects of a Choice Auto Insurance Plan on Insurance CostsSanta Monica, CA: RAND Corporation, Institute for Civil Justice.

    Google Scholar 

  • Abrahamse, Allan F., and Stephen J. Carroll, 1997The Effects of a Choice Automobile Insurance Plan under Consideration by the Joint Economic Committee of the United States CongressSanta Monica, CA: RAND Corporation, Institute for Civil Justice.

    Google Scholar 

  • Berte, Marjorie M., 1991Hit Me-I Need the Money!San Francisco, CA: ICS Press, 1991.

    Google Scholar 

  • Browne, Mark J., and Robert Puelz, 1996, Statutory Rules, Attorney Involvement, and Automobile Liability ClaimsThe Journal of Risk and Insurance63, 1, 77–94.

    Article  Google Scholar 

  • California Department of Insurance, 19971996 Automobile Premium Surveyon-line at <http://www.insurance.ca.gov/sab/autosurvey.html>.

    Google Scholar 

  • Carroll, Stephen J, and Allan Abrahamse, 1998The Effects of a Choice Automobile Insurance Plan on Insurance Costs and Compensation: An Updated AnalysisSanta Monica, CA: RAND Corporation, Institute for Civil Justice.

    Google Scholar 

  • Carroll, Stephen J., Allan Abrahamse, and Mary Vaiana, 1995The Costs of Excess Medical Claims for Automobile Personal InjuriesSanta Monica, CA: RAND Corporation, Institute for Civil Justice.

    Google Scholar 

  • Carroll, Stephen J., James S. Kakalik, Nicholas M. Pace, and John L. Adams, 1991, No-Fault Approaches to Compensating People Injured in Automobile Accidents, Santa Monica, CA: RAND Corporation, Institute for Civil Justice.

    Google Scholar 

  • Conning and Co., 1997, Data provided to the Joint Economic Committee of the U.S. Congress, January 16, Hartford, CT: Conning and Co.

    Google Scholar 

  • Council of Economic Advisers, 1998Economic Report of the PresidentWashington, DC: Government Printing Office.

    Google Scholar 

  • Crotty, Paul A., 1996, Shutting off the Money FaucetCitylaw2, 6, 125–129.

    Google Scholar 

  • Dornstein, Ken, 1996Accidentally on Purpose: The Making of a Personal Injury Underworld in AmericaNew York, NY: St. Martin’s Press.

    Google Scholar 

  • Fleming, John G., 1966, The Collateral Source Rule and Loss Allocation in Tort LawCalifornia Law Review54, 4, 1478–1549.

    Article  Google Scholar 

  • Giuliani, Rudolph, 1996, Statement submitted to the Senate Committee on Commerce, Science, and Transportation, U.S. Congress, September 24.

    Google Scholar 

  • Heilbroner, Robert L., 1960, Halfway to the Moon on WheelsPetroleum TodaySpring, 1–3. (Cited inThe Road and the Car in American Life1971, by John B. Rae, Cambridge, MA: MIT Press, 370.)

    Google Scholar 

  • Highway Loss Data Institute, 1995, Atlas of Automobile Injury and Collision Losses in Large Metropolitan Areas, Arlington, VA: HLDI.

    Google Scholar 

  • Holzer, Harry J., Keith R. Ihlanfeldt, and David L. Sjoquist, 1994, Work, Search, and Travel among White and Black YouthJournal of Urban Economics35, 3, 320–345.

    Article  Google Scholar 

  • Huebner, S. S., Kenneth Black, Jr., and Bernard L. Webb, 1996Property and Liability Insurance4thEdition, Upper Saddle River, NJ: Prentice Hall.

    Google Scholar 

  • Ihlanfeldt, Keith R., 1993, Intra-Urban Job Accessibility and Hispanic Youth Employment RatesJournal of Urban Economics33, 2, 254–271.

    Article  Google Scholar 

  • Ihlanfeldt, Keith R., and Madelyn V. Young, 1996, The Spatial Distribution of Black Employment between the Central City and the SuburbsEconomic Inquiry34, 4, 693–707.

    Article  Google Scholar 

  • Insurance Information Institute, 1997, Data provided to the Joint Economic Committee of the U.S. Congress, April 30, New York, NY: III.

    Google Scholar 

  • Insurance Information Institute, annualThe Fact Book-Property/Casualty Insurance FactsNew York, NY: III.

    Google Scholar 

  • Insurance News NetworkStateson-line at <http://www.insure.com/statesh.

  • Insurance Research Council, 1991Automobile Injury Claims in HawaiiOak Brook, IL: IRC.

    Google Scholar 

  • Insurance Research Council, 1993Public Attitude Monitor 1993Oak Brook, IL: IRC.

    Google Scholar 

  • Insurance Research Council, 1994aAuto Injuries: Claiming Behavior and Its Impact on Insurance CostsOak Brook, IL: IRC.

    Google Scholar 

  • Insurance Research Council, 1994bPaying for Auto Injuries: A Consumer Panel Survey of Auto Accident VictimsOak Brook, IL: IRC.

    Google Scholar 

  • Insurance Research Council, 1995Trends in Auto Injury Claims2nd Edition, Wheaton, IL: IRC.

    Google Scholar 

  • Insurance Research Council, 1996Fraud and Buildup in Auto Injury ClaimsWheaton, IL: IRC.

    Google Scholar 

  • Insurance Services Office, Inc. and National Association of Independent Insurers, 1988Factors Affecting Urban Auto Insurance CostsNew York: ISO and NAII.

    Google Scholar 

  • Joint Economic Committee, U.S. Congress, 1996Improving the American Legal System: The Economic Benefits of Tort ReformWashington, DC: JEC of the U.S. Congress.

    Google Scholar 

  • Joint Economic Committee, U.S. Congress, 1997The Benefits and Savings of Auto ChoiceWashington, DC: JEC of the U.S. Congress.

    Google Scholar 

  • Kain, John F., 1968, Housing Segregation, Negro Employment, and Metropolitan DecentralizationQuarterly Journal of Economics82, 2, 175–197.

    Article  Google Scholar 

  • Kain, John F., 1992, The Spatial Mismatch Hypothesis: Three Decades LaterHousing Policy Debate3, 2, 371–460.

    Google Scholar 

  • Kain, John F., and John R. Meyer, 1970, Transportation and PovertyThe Public Interest18, 75–87.

    Google Scholar 

  • Kasarda, John D., 1995, Industrial Restructuring and the Changing Location of Jobs, inState of the Union: America in the 1990sVolume I: Economic Trends (Reynolds Farley, ed.), New York, NY: Russell Sage Foundation.

    Google Scholar 

  • Kasarda, John D., and Kwok-fai Ting, 1996, Joblessness and Poverty in America’s Central Cities: Causes and Policy PrescriptionsHousing Policy Debate7, 2, 387–419.

    Google Scholar 

  • Klein, Robert, 1995, Reducing Urban Auto Insurance Costs inAffordable Auto Insurance for Urban Communities: The Universe of Possibilities(Guila P. Parker and James L. Brown, eds.), Milwaukee, WI: Center for Consumer Affairs.

    Google Scholar 

  • Lamberty, Steve, 1995, Urban and Non-Urban Auto Insurance ComparisonsNAIC Research Quarterly1, 4, 14–19.

    Google Scholar 

  • MacManus, Susan A., and Patricia A. Turner, 1993, Litigation as a Budgetary Constraint: Problem Areas and CostsPublic Administration Review53, 5, 462–472.

    Article  Google Scholar 

  • Maril, Robert Lee, 1993, The Impact of Mandatory Auto Insurance upon Low Income Residents of Maricopa County, Arizona, unpublished manuscript.

    Google Scholar 

  • Marter, Sarah S., and Herbert I. Weisberg, 1992, Medical Expenses and the Massachusetts Automobile Tort Reform Law: A First Review of 1989 Bodily Injury Liability ClaimsJournal of Insurance Regulation 104, 462–514.

    Google Scholar 

  • Mooney, Sean F., 1992The Cost of Urban Auto InsuranceNew York, NY: Insurance Information Institute.

    Google Scholar 

  • National Association of Independent Insurers, 1997, Data provided to the Joint Economic Committee from the NAII Auto Compilation, January 17, Des Plaines, IL: NAII.

    Google Scholar 

  • National Association of Insurance Commissioners, annualState Average Expenditures and Premiums for Personal Automobile InsuranceKansas City, MO: NAIC.

    Google Scholar 

  • New Jersey Department of Insurance, 19951995 Automobile Insurance Premium Comparison SurveyTrenton, NJ: NJDOI.

    Google Scholar 

  • O’Connell, Jeffrey, Stephen Carroll, Michael Horowitz, and Allan Abrahamse, 1993, Consumer Choice in the Auto Insurance MarketMaryland Law Review52, 4, 1016–1062.

    Google Scholar 

  • O’Connell, Jeffrey, Stephen Carroll, Michael Horowitz, Allan Abrahamse, and Paul Jamieson, 1996, The Comparative Costs of Allowing Consumer Choice for Auto Insurance in All Fifty StatesMaryland Law Review55, 1, 160–222.

    Google Scholar 

  • O’Connell, Jeffrey, Stephen Carroll, Michael Horowitz, Allan Abrahamse, and Daniel Kaiser, 1995, The Costs of Consumer Choice for Auto Insurance in States without No-Fault InsuranceMaryland Law Review54, 2, 281–351.

    Google Scholar 

  • Office of Management and Budget, 1998Budget of the United States Government Fiscal Year 1998Washington, DC: Government Printing Office.

    Google Scholar 

  • Ong, Paul M., 1996, Work and Automobile Ownership among Welfare RecipientsSocial Work Research20, 4, 255–262.

    Google Scholar 

  • O’Regan, Katherine M., and John M. Quigley, 1996, Teenage Employment and the Spatial Isolation of Minority and Poverty Households-CommentJournal of Human Resources31, 3, 692–702.

    Article  Google Scholar 

  • Pawasarat, John, 1997Initial Findings on Mobility and Employment of Public Assistance Recipients in Milwaukee County and Factors Relating to Changes in W-2 Regions over TimeUniversity of Wisconsin-Milwaukee, Employment and Training Institute, on-line at <http://www.uwm.edu/dept/eti/afdcmobl.htm>.

    Google Scholar 

  • Pennsylvania Department of Insurance, 1995, cited inPennsylvania Auto Insurance Premiums(1997, Insurance News Network), on-line at <http://www.insure.com/states/pa/>.

    Google Scholar 

  • Pritchard, Tim, and Larry DeBoer, 1995, The Effect of Taxes and Insurance Costs on Automobile Registrations in the United StatesPublic Finance Quarterly23, 3, 283–304.

    Article  Google Scholar 

  • Smith, Eric, and Randall Wright, 1992, Why Is Automobile Insurance in Philadelphia So Damn Expensive?American Economic Review82, 4, 756–772.

    Google Scholar 

  • State of California, Governor’s Commission on the Los Angeles Riots, 1965, Violence in the City-An End or a Beginning?, Los Angeles, CA: State of California.

    Google Scholar 

  • Taylor, Brian D., and Paul M. Ong, 1995, Spatial Mismatch or Automobile Mismatch? An Examination of Race, Residence, and Commuting in U.S. Metropolitan AreasUrban Studies32, 9, 1453–1473.

    Article  Google Scholar 

  • Tobias, Andrew, 1997, Testimony to the Senate Committee on Commerce, Science, and Transportation, U.S. Congress, July 17.

    Google Scholar 

  • U.S. Bureau of the Census, 1995Asset Ownership of Households: 1993Washington, DC: Government Printing Office.

    Google Scholar 

  • U.S. Bureau of the Census, 1996Government Finances: 1991–92Series GF/92–5, Washington, DC: Government Printing Office.

    Google Scholar 

  • U.S. Department of Energy, Energy Information Administration, 1993, Household Vehicles Energy Consumption 1991, DOE/EIA-0464, Washington, DC: Government Printing Office.

    Google Scholar 

  • U.S. Department of Justice, Bureau of Justice Statistics, 1995Civil Jury Cases and Verdicts in Large CountiesNCJ-154346, Washington, DC: BJS.

    Google Scholar 

  • U.S. Department of Justice, Bureau of Justice Statistics, 1995Tort Cases in Large CountiesNCJ-153177, Washington, DC: BJS.

    Google Scholar 

  • U.S. Department of Justice, Bureau of Justice StatisticsCivil Justice Survey of State Courts 1992cited in the University of Michigan’s Inter-university Consortium for Political and Social Research, on-line at <http://www.icpsr.umich.edu/index.html>.

  • U.S. Department of Justice, Federal Bureau of Investigation, 1995, Press release, May 24, Washington, DC: FBI.

    Google Scholar 

  • U.S. Department of Labor, Bureau of Labor Statistics, 19971995 Consumer Expenditure Surveyon-line at <http://stats.bls.gov/blshome.html>.

    Google Scholar 

  • U.S. Department of Labor, Bureau of Labor Statistics, 1997, unpublished data from the1995 Consumer Expenditure SurveyWashington, DC: BLS.

    Google Scholar 

  • U.S. Department of Labor, Bureau of Labor Statistics, 1998Consumer Prices Indexeson-line at <http://stats.bls.gov/cpihome.htm>.

    Google Scholar 

  • U.S. Department of Labor, Employment and Training Administration, 1997, Press release, November 17, “Labor Secretary Herman Kicks-off Nationwide Welfare-to-Work Tour,” Washington, DC: ETA.

    Google Scholar 

  • U.S. Department of Transportation, Federal Highway Administration, 1992Cost of Owning and Operating Automobiles Vans and Light Trucks 1991FHWA-PL-92–019, Washington, DC: FHA.

    Google Scholar 

  • U.S. Department of Transportation, Federal Highway Administration, 1996Highway Statistics 1995Washington, DC: Government Printing Office.

    Google Scholar 

  • U.S. Department of Transportation, National Highway Traffic Safety Administration, 1992Source of Payment for the Medical Cost of Motor Vehicle Injuries in the United States(by Joan S. Harris), DOT HS 807–800, Washington, DC: Government Printing Office.

    Google Scholar 

  • U.S. Department of Transportation, National Highway Traffic Safety Administration, 1992The Economic Cost of Motor Vehicle Crashes 1990(by Lawrence J. Blincoe and Barbara M. Faigin), DOT HS 807–876, Washington, DC: Government Printing Office.

    Google Scholar 

  • U.S. Department of Transportation, National Highway Traffic Safety Administration, 1993Saving Lives and Dollars–Highway Safety Contribution to Health Care Reform and Deficit ReductionWashington, DC: Government Printing Office.

    Google Scholar 

  • U.S. Department of Transportation, National Highway Traffic Safety Administration, 1996The Economic Cost of Motor Vehicle Crashes 1994(by Lawrence J. Blincoe), DOT HS 808–425, Washington, DC: Government Printing Office.

    Google Scholar 

  • U.S. Department of Transportation, National Highway Traffic Safety Administration, 1996Rural and Urban Crashes: A Comparative AnalysisDOT HS 808–450, Washington, DC: NHTSA.

    Google Scholar 

  • U.S. General Accounting Office, 1995Welfare to Work: Most AFDC Training Programs not Emphasizing Job PlacementHEHS-95–113, Washington, DC: GAO.

    Google Scholar 

  • Whitman, Christine Todd, 1997, Testimony to the Joint Economic Committee, U.S. Congress, March 19.

    Google Scholar 

  • Wilson, William Julius, 1996When Work DisappearsNew York, NY: Vintage Books.

    Google Scholar 

  • Wolfram, Charles W., 1986Modern Legal EthicsSt. Paul, MN: West Publishing Co.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Joint Economic Committee, U.S. Congress, USA

    Dan Miller

Authors
  1. Dan Miller
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. California State University, Sacramento, USA

    Edward L. Lascher Jr.

  2. Temple University, USA

    Michael R. Powers

Rights and permissions

Reprints and permissions

Copyright information

© 2001 Kluwer Academic Publishers

About this chapter

Cite this chapter

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

Download citation

  • DOI: https://doi.org/10.1007/978-1-4615-1541-8_10

  • Publisher Name: Springer, Boston, MA

  • Print ISBN: 978-0-7923-7467-1

  • Online ISBN: 978-1-4615-1541-8

  • eBook Packages: Springer Book Archive

Publish with us

Policies and ethics

Search

Navigation