1994•Digital Commons at University of Maryland Carey Law (University of Maryland Francis King Carey School of Law)Open access
Consumer Choice in the Auto Insurance Market
Jeffrey O’Connell, Stephen J. Carroll, Michael C. Horowitz, Allan Abrahamse
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Abstract
John Garamendi, California's powerful insurance commissioner, surprised his staff one day by declaring that henceforth, "no-fault" insurance would be called "personal-protection " insurance in his office."What's the difference?"asked an aide at a staff meeting."About a million votes, "replied Walter Zelman, a Garamendi deputy.' I. THE PRESENT SITUATIONIt was the often-acknowledged-and even arguably horrendous-inadequacy of traditional tort liability as applied to personal injury suffered in automobile accidents 2 that led to the enactment of no-fault insurance laws in many states.3 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 from the inadequacies of both tort law and no-fault laws?In 1991, the RAND Corporation published an appraisal of nofault laws, being careful to make clear that RAND itself neither supported nor opposed no-fault reforms.4 As the summary of the RAND study noted, disputes about auto insurance continue to excite debate.5 Critics of the tort system insist that its costs are too high and that its payments are "inefficient, inequitable, and slow" in
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