Fault/Liability
Insurance System |
Personal Injury
Protection (PIP) System |
| Pays no benefits to more than 30%
of all accident victims (often the victims of single-car accidents). |
Pays benefits to all accident
victims. |
| Pays benefits contingent on other
driver’s fault. |
Pays benefits to all accident
victims, regardless of fault. |
| Encourages fraud (more than
one-third of all medical claims are fraudulent or for the build-up of claims in response
to the incentives of the fault system). |
Eliminates the incentives for
fraud in the fault/liability insurance system. |
| Makes recovery contingent on
other driver’s behavior and auto insurance coverage. |
Allows each individual to
determine his or her level of guaranteed benefits for injury. |
Provides inequitable coverage:
- Minor injuries are compensated at an average of 2 to 3 times
economic losses.
- Serious injuries are compensated at an average of less than
50% of economic losses.
|
Affords equitable coverage:
- All economic losses are compensated up to the level of
coverage selected.
- Permits suits for excess economic loss.
- Gives greater protection for serious loss.
|
| In serious injury
cases, pays for losses only after trial or settlement, which can take 2 to 4 years or
more. |
In minor and serious
injury cases, pays for insured losses within 30 days of submission of a claim. |
| Pays almost twice as many dollars
for lawyers as for victims’ legitimate medical bills and lost wages. |
Eliminates the need for most
lawyers. Uses the savings to pay more injured people more equitably and to lower premiums. |
| Is unnecessarily
expensive: $400/yr. for average bodily injury premium, nationwide. |
Is affordable:
$216/yr. average for PIP -- personal injury protection benefits and residual bodily injury
liability coverage. |
