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- Title
Financing Uninsured Motorists: Premiums at the Pump.
- Authors
Sommer, David W.; Hoffer, George E.; Miller, Elbert G.
- Abstract
Increasing percentages of uninsured motorists (UM), particularly in California, have lead to proposals which would radically alter the manner in which liability insurance is procured and delivered. This paper describes a more modest proposal that addresses aspects of the UM problem without destroying the present market-based system. The proposal is that basic limits bodily injury UM premiums be collected via levying a small per gallon gasoline surcharge. These state-collected premiums would be distributed to all insurers in the state on the basis of liability policies in force. Existing settlement mechanisms would remain in place, and no additional government bureaucracy would be needed to implement the plan. The paper estimates that had the plan been in effect in California in 1991, the per gallon premium at state-prescribed minimum liability limits would have been $.059; many California motorists would have paid significantly less than the $67 statewide average 1991 UM premium. The paper closes with a discussion of the attributes and problems of the proposal.
- Subjects
UNINSURED motorist insurance; AUTOMOBILE drivers
- Publication
Journal of Insurance Regulation, 1995, Vol 13, Issue 3, p359
- ISSN
0736-248X
- Publication type
Article