IDEAS home Printed from https://ideas.repec.org/a/bla/jrinsu/v91y2024i1p193-212.html
   My bibliography  Save this article

Availability of the seat belt defense: Implications for auto liability insurance

Author

Listed:
  • Patricia Born
  • J. Bradley Karl
  • Charles Nyce

Abstract

A “seat belt defense” allows a defendant in a third‐party auto liability event to present evidence of seat belt nonuse to reduce a plaintiff's recovery. When successfully applied, the defense has a direct effect on reducing liability payouts by insurers for accidents. Our analysis reveals that seat belt defense laws are associated with a 10% reduction in auto claims costs, which equates to a reduction in loss costs of approximately $14 per insured vehicle. We find little evidence that the defense reduces accident frequency and no evidence that the defense affects seat belt usage. The lack of a deterrent effect on driving behavior suggests that the availability of the defense is not salient to drivers. The reduction in loss costs supports the notion that defense lawyers are aware of the defense and make use of it. The resulting effect of lowering insurance payouts may alleviate increasing auto insurance costs.

Suggested Citation

  • Patricia Born & J. Bradley Karl & Charles Nyce, 2024. "Availability of the seat belt defense: Implications for auto liability insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 91(1), pages 193-212, March.
    • Handle: RePEc:bla:jrinsu:v:91:y:2024:i:1:p:193-212
    DOI: 10.1111/jori.12458
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jori.12458
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jori.12458?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dur, Robert & Vollaard, Ben, 2019. "Salience of law enforcement: A field experiment," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 208-220.
    2. Myungho Paik & Bernard Black & David A. Hyman, 2013. "The Receding Tide of Medical Malpractice Litigation: Part 1—National Trends," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 10(4), pages 612-638, December.
    3. Patricia Born, 2017. "The Influence of Tort Reform on Auto Liability Losses and Premiums," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 40(1), pages 61-89.
    4. Loewenstein, George & Friedman, Joelle Y. & McGill, Barbara & Ahmad, Sarah & Linck, Suzanne & Sinkula, Stacey & Beshears, John & Choi, James J. & Kolstad, Jonathan & Laibson, David & Madrian, Brigitte, 2013. "Consumers’ misunderstanding of health insurance," Journal of Health Economics, Elsevier, vol. 32(5), pages 850-862.
    5. Alma Cohen & Liran Einav, 2003. "The Effects of Mandatory Seat Belt Laws on Driving Behavior and Traffic Fatalities," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 828-843, November.
    6. Yiling Deng & George Zanjani, 2018. "What Drives Tort Reform Legislation? An Analysis Of State Decisions To Restrict Liability Torts," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 85(4), pages 959-991, December.
    7. Cummins, J David & Tennyson, Sharon, 1996. "Moral Hazard in Insurance Claiming: Evidence from Automobile Insurance," Journal of Risk and Uncertainty, Springer, vol. 12(1), pages 29-50, January.
    8. J. David Cummins & Sharon Tennyson, 1992. "Controlling Automobile Insurance Costs," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 95-115, Spring.
    9. Paul Heaton, 2017. "How Does Tort Law Affect Consumer Auto Insurance Costs?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 84(2), pages 691-715, June.
    10. Mary A. Weiss & Sharon Tennyson & Laureen Regan, 2010. "The Effects of Regulated Premium Subsidies on Insurance Costs: An Empirical Analysis of Automobile Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(3), pages 597-624, September.
    11. David J. Feber & Judith M. Feldmeier & Keith J. Crocker, 2003. "The Economic Effects of Road Safety Improvements: An Insurance Claims Analysis," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 70(4), pages 651-664, December.
    12. Martin F. Grace & J. Tyler Leverty, 2013. "How Tort Reform Affects Insurance Markets," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(6), pages 1253-1278, December.
    13. David J. Houston & Lilliard E. Richardson, Jr., 2006. "Reducing traffic fatalities in the American States by upgrading seat belt use laws to primary enforcement," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(3), pages 645-659.
    14. Myungho Paik & Bernard Black & David Hyman, 2013. "The Receding Tide of Medical Malpractice Litigation: Part 2—Effect of Damage Caps," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 10(4), pages 639-669, December.
    15. Ashesh Rambachan & Jonathan Roth, 2023. "A More Credible Approach to Parallel Trends," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(5), pages 2555-2591.
    16. W. Kip Viscusi & Patricia H. Born, 2005. "Damages Caps, Insurability, and the Performance of Medical Malpractice Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 72(1), pages 23-43, March.
    17. Patricia Born & W. Kip Viscusi & Tom Baker, 2009. "The Effects of Tort Reform on Medical Malpractice Insurers' Ultimate Losses," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 76(1), pages 197-219, March.
    18. Loewenstein, George & Friedman, Joelle Y. & McGill, Barbara & Ahmad, Sarah & Linck, Suzanne & Sinkula, Stacey & Beshears, John Leonard & Choi, James J. & Kolstad, Jonathan & Laibson, David I. & Madria, 2013. "Consumers’ Misunderstanding of Health Insurance," Scholarly Articles 17190506, Harvard University Department of Economics.
    19. J. Bradley Karl & Charles Nyce, 2019. "How Cellphone Bans Affect Automobile Insurance Markets," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 86(3), pages 567-593, September.
    20. Grace, Martin F. & Phillips, Richard D., 2008. "Regulator performance, regulatory environment and outcomes: An examination of insurance regulator career incentives on state insurance markets," Journal of Banking & Finance, Elsevier, vol. 32(1), pages 116-133, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hao Yu & Olesya Baker, 2022. "Do noneconomic damage caps reduce medical malpractice insurance premiums? Evidence from North Carolina," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 25(2), pages 201-218, June.
    2. Jingshu Luo & Hua Chen & Martin Grace, 2022. "Medicaid expansion, tort reforms, and medical liability costs," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 89(3), pages 789-821, September.
    3. Anderson, D. Mark & Liang, Yang & Sabia, Joseph J., 2022. "Mandatory Seatbelt Laws and Traffic Fatalities: A Reassessment," IZA Discussion Papers 15843, Institute of Labor Economics (IZA).
    4. McShane, Michael K. & Cox, Larry A. & Butler, Richard J., 2010. "Regulatory competition and forbearance: Evidence from the life insurance industry," Journal of Banking & Finance, Elsevier, vol. 34(3), pages 522-532, March.
    5. Bidisha Mandal & Nilton Porto & D. Elizabeth Kiss & Soo Hyun Cho & Lorna Saboe‐Wounded Head, 2023. "Health insurance coverage during the COVID‐19 pandemic: The role of Medicaid expansion," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(1), pages 296-319, January.
    6. Paola Fersini & Salvatore Forte & Giuseppe Melisi & Gennaro Olivieri, 2019. "A stochastic model to evaluate pricing distortions in indemnity insurance methods for MTPL insurance," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 42(1), pages 103-133, June.
    7. Alan C. Monheit & Irina B. Grafova, 2018. "Education and family health care spending," Southern Economic Journal, John Wiley & Sons, vol. 85(1), pages 71-92, July.
    8. Yoshihiko Kadoya & Naheed Rabbani & Mostafa Saidur Rahim Khan, 2022. "Insurance literacy among older people in Japan: The role of socio‐economic status," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(2), pages 788-805, June.
    9. Matter, Ulrich & Stutzer, Alois, 2015. "Politico-economic determinants of tort reforms in medical malpractice," Working papers 2015/02, Faculty of Business and Economics - University of Basel.
    10. Sebastian Panthöfer, 2022. "Do doctors prescribe antibiotics out of fear of malpractice?," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 19(2), pages 340-381, June.
    11. D. Mark Anderson & Yang Liang & Joseph J. Sabia, 2024. "Mandatory seatbelt laws and traffic fatalities: A reassessment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 39(3), pages 513-521, April.
    12. Benjamin Ho & Elaine Liu, 2011. "Does sorry work? The impact of apology laws on medical malpractice," Journal of Risk and Uncertainty, Springer, vol. 43(2), pages 141-167, October.
    13. Nathaniel Hendren & Camille Landais & Johannes Spinnewijn, 2021. "Choice in Insurance Markets: A Pigouvian Approach to Social Insurance Design," Annual Review of Economics, Annual Reviews, vol. 13(1), pages 457-486, August.
    14. Kaufmann, Cornel & Müller, Tobias & Hefti, Andreas & Boes, Stefan, 2018. "Does personalized information improve health plan choices when individuals are distracted?," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 197-214.
    15. Barnes, Andrew J. & Karpman, Michael & Long, Sharon K. & Hanoch, Yaniv & Rice, Thomas, 2021. "More intelligent designs: Comparing the effectiveness of choice architectures in US health insurance marketplaces," Organizational Behavior and Human Decision Processes, Elsevier, vol. 163(C), pages 142-164.
    16. Chong, Alberto & Restrepo, Pascual, 2017. "Regulatory protective measures and risky behavior: Evidence from ice hockey," Journal of Public Economics, Elsevier, vol. 151(C), pages 1-11.
    17. Malani, Anup & Reif, Julian, 2015. "Interpreting pre-trends as anticipation: Impact on estimated treatment effects from tort reform," Journal of Public Economics, Elsevier, vol. 124(C), pages 1-17.
    18. Jacob Goldin & Ithai Z. Lurie & Janet McCubbin, 2019. "Health Insurance and Mortality: Experimental Evidence from Taxpayer Outreach," NBER Working Papers 26533, National Bureau of Economic Research, Inc.
    19. Sharon Tennyson, 2007. "Efficiency Consequences of Rate Regulation in Insurance Markets," NFI Policy Briefs 2007-PB-03, Indiana State University, Scott College of Business, Networks Financial Institute.
    20. Thomas J. Miceli & Michael P. Stone, 2013. "The Determinants Of State-Level Caps On Punitive Damages: Theory And Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 31(1), pages 110-125, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jrinsu:v:91:y:2024:i:1:p:193-212. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/ariaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.