No-Fault Insurance and Automobile Accidents

Removing accident liability through a no-fault system may only have minor effects on driver care, yet existing studies assessing whether no-fault auto insurance requirements increase accidents use fatal accidents as the primary outcome. In this paper we estimate the effect of no-fault on overall accident rates using detailed data from police accident reports in New Jersey, North Carolina, and Utah. We focus on accidents involving out-of-state drivers and account for differences in driving prevalence using accidents beyond the control of the driver. Controlling for a wide variety of accident, driver, and vehicle characteristics, we find little evidence that drivers under no-fault cause more accidents. Results on accident severity are mixed. JEL Classification: K13, G28 ______________________________________________________________________________ We wish to thank David Loughran, Stephen Carroll, and seminar participants at RAND helpful comments. We also appreciate the assistance of Yusuf Mohamedshah, who provided help in obtaining the HSIS data. The contents of this paper are solely the responsibility of the authors and do not reflect the opinions of the RAND Corporation. Heaton can be reached at [email protected] and Helland at [email protected].