Abstract

Auto liability compensation arrangements are viewed as a total system, consisting of companies, courts, and lawyers. Inputs to the system are liability premium payments, some court costs, and some lawyer's fees. Output is in the form of benefit settlements for car accident victims. The efficiency of the system is identified as a ratio of output value to input value. Possibilities of reforming auto practice are discussed within this efficiency context. This discussion includes a proposal for negative insurance that would involve company purchase of an individual's legal rights to accident compensation.

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