True no-fault auto insurance could mean savings of hundreds of dollars for families in some states although the overall impact on premiums nationwide would be little more than 6 percent, according to a study commissioned by a group backing universal no-fault.
The new study did not identify which states would see such large savings, and its sponsors said they were still "massaging the data" to come up with those estimates.The analysis by Edward J. Heiden, a Washington consultant, for the new group New Start, said consumers in 47 states could be expected to save $3.7 billion in premiums overall under a true no-fault system.
There are 135 million cars on the road, and the study said the average auto insurance premium was $434 per car in 1987.
This would imply a national insurance bill of $59 billion if there were no uninsured cars and no trucks used as cars were counted. If that $59 billion is true, the $3.7 billion saving would be a little more than 6 percent.
"It is reasonable to conclude that some households could see declines in their annual insurance bills of as much as several hundred dollars" if plans similar to those of Michigan, Florida and New York were used nationwide, the group said.
New Start considers those states to have the only true no-fault systems. Twelve states and the District of Columbia use elements of no-fault in their insurance law, and 11 states have what the group calls "phony no-fault."
Under no-fault, victims file claims against their own companies, just as they would for medical insurance. The companies are supposed to pay no matter who is at fault.
With traditional insurance, a victim must sue somebody to determine who caused the accident and whose insurance must pay.
The New Start group was organized by James L. Brown, director of the Center for Consumer Affairs at the University of Wisconsin and the Rev. Robert J. McEwen, professor of economics at Boston College. Brown said no insurance industry funds had been used in forming the new organization, which he said has gained 20,000 members since it was born last October.