Determinants and implications of the selection of full vs. limited tort automobile insurance in Pennsylvania and New Jersey

The relationship between accident risk and tort right limitation has been the subject of considerable theoretical analysis and empirical inquiry. In Pennsylvania and New Jersey, resident drivers have the option of retaining full tort rights, or accepting limitations to those rights in exchange for lowered premiums. This study focuses on identifying differences in selected automobile accident claim experience measures of full and limited tort selectors at the aggregate and individual claim level. Empirical results indicate that limited tort selection is greater in counties where first-party claim frequency and severity are higher. Furthermore, limited tort selection is not uniformly associated with a greater assignment of the degree of driver fault, a more serious injury or a greater number of medical visits for all closed claim samples and state and survey year results differ substantially.