Continuing Insurance Education

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.