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No-Fault Auto Insurance

Not surprisingly, the insurance industry bitterly opposes pro-consumer reforms that would force insurers to justify their rates, limit excessive profiteering and waste and create a more competitive marketplace. It's purpose: lower premiums.

To counter the campaigns seeking such reforms, insurance companies have promoted "no-fault" auto insurance. No fault mandates limits on claims by and compensation to auto accident victims, in effect regulating public access to the courts. While the insurance industry reform approach focuses on cutting the price of the policy, the industry's no-fault approach focuses on reducing certain policy benefits for victims while at the same time expanding coverage to include those who cause auto accidents.

The FTCR Bottom Line: No fault has proven to be a failure in every instance in which it has been tried.

More Information

History of the No-Fault Concept.
This is a brief explanation of no fault, who came up with the idea and its history. ... more

A Failed Experiment: Analysis and Evaluation of No-Fault Laws
This is a detailed look at how no fault laws have worked in practice. Data from no fault states shows that no fault increases premiums while restricting consumers' rights.... more

An Analysis and Critique of the RAND Corporation's Studies in Support of No Fault Laws
Santa Monica, California-based RAND Corporation has repeatedly issued studies suggesting that no fault will lower premiums (even though it never has). This is a review and discussion of the RAND reports, along with correspondence from FTCR to RAND que... more

"Choice" No-Fault and Other Recent Proposals
A detailed analysis of various no-fault insurance proposals presented by the insurance industry... more

Proposition 200
The 'Pure No-Fault' Initiative, California, 1996
This long (18 pages) and complex ballot initiative, rejected by California voters in 1996, would have eliminated the principle of "fault" in every auto accident case, no matter how severe (except those involving criminal activity).... more

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