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- Title
Ratemaking Inequities Under a No-Fault Automobile Insurance Law.
- Authors
Zieta, Emily Norman; Hayes, Robert D.; Maroney, Patrick F.; Hollman, Kenneth W.
- Abstract
Widespread increases in automobile premiums have been stimulated by such factors as higher medical and repair costs, greater frequency of auto theft, the inclination to litigate claims, and surges in court awards to injured parties. No-fault laws have been implemented in many states to address some of these factors, and these laws are affected ratemaking strategies for many insurers. This article examines the potential for premium inequities among drivers in Florida, where a no-fault law requires that each driver obtain some, but not all, automobile insurance coverage's. It is found that statistically significant variations in relativity factors result when a common relativity factor is applied to all the coverages a driver purchases, indicating that cross-subsidization may occur across classes of drivers.
- Subjects
FLORIDA; UNITED States; NO-fault automobile insurance; AUTOMOBILE drivers; AUTOMOBILE insurance; INSURANCE premiums; INSURANCE law
- Publication
Journal of Insurance Issues, 1996, Vol 19, Issue 2, p133
- ISSN
1531-6076
- Publication type
Article