The Alliance to Revitalize California, a private, nonprofit organization, has proposed a no-fault automobile insurance plan for California (Coalition for Common Sense, November 1994). The California Department of Insurance asked the Institute for Civil Justice to analyze the effects of the proposed plan on automobile insurance costs in California. We used a database we had developed in the cour...

Research on insurer management of opportunism in claiming has developed in two parallel literatures. One is a theoretical literature on insurance contracting that yields predictions about the nature of optimal auditing strategies for the deterrence of fraud. The other is a literature based upon statistical analysis of claims that yields empirical strategies for the detection of fraudulent claim...

This article introduces to the statistical and insurance literature a mathematical technique for an a priori classification of objects when no training sample exists for which the exact correct group membership is known. The article also provides an example of the empirical application of the methodology to fraud detection for bodily injury claims in automobile insurance. With this technique, p...

Thirteen states currently either mandate no-fault auto insurance or allow drivers to choose between no-fault and tort insurance. No-fault auto insurance requires individuals to carry personal injury protection (PIP) insurance that compensates them for economic losses sustained in automobile accidents, regardless of whoever is at fault, and prohibits individuals from suing for non-economic damag...