With the popularity of the automobile came many problems. First, millions of motorists are injured or disabled each year in automobile accidents and thousands of persons killed. More than 30 million auto accidents a year cause between 40,000-50,000 deaths and five million injuries, as well as economic losses:
1. $ 10.2 billion in 1960
2. $ 23.5 billion in 1970
3. $ 80 billion in 1986
4. $100 billion in 1990
The high cost of medical expenses, pain and suffering, the unexpected death of a family member and damage to or loss of an automobile has a profound impact on the family.
In addition, society must deal with the problem of compensating innocent automobile accident victims for their bodily injuries or property damage caused by negligent drivers. The various methods for compensating automobile accident victims include the Tort Liability System, Financial Responsibility Laws, Compulsory Insurance Laws, Unsatisfied Judgment Funds, Uninsured Motorists Coverage and Under-Insured Motorists Coverage.
Many people drive automobiles, which creates severe problems for the insurance companies. The biggest problems revolve around four basic areas:
1 – high frequency of automobile accidents
2 – high costs associated with automobile accidents
3 – actions of irresponsible drivers
4 – substantial underwriting losses
No-Fault Automobile Insurance Laws will be examined as an alternative technique for compensating accident victims.
Automobile insurers also have the problem of providing Automobile Insurance to irresponsible drivers, such as, high-risk drivers, drunk drivers and persons who habitually violate traffic laws.
High Frequency of Automobile Accidents – American motorists are smashing into each other at an alarming rate. Example: in 1993 motorists were involved in 36 million motor vehicle accidents. About 7 million injuries resulted from these accidents and about 51,000 were killed. Although the majority of accidents occur in urban locations, drivers in rural areas are more likely to be killed. In 1993, 60% of the fatal accidents occurred in rural areas.
Most fatal accidents are due to two major causes: (1) improper driving, (2) alcohol. One study showed that 62% of the fatal accidents in 1992 involved improper driving, such as, speeding, right-of-way violations, driving to the left of center and other careless acts. In addition, it is estimated that drunk drivers are involved in 50-55% of all fatal accidents.