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Personal Bias in Automobile Claims Settlement

Author

Listed:
  • Helen Doerpinghaus
  • Joan Schmit
  • Jason Jia‐Hsing Yeh

Abstract

Despite the importance of claims handling practices to consumers and insurers, relatively little research has been done in this area. Our purpose here is to consider one aspect of automobile bodily injury liability claims management: the assignment of fault across parties as judged by the insured defendant's claims adjuster. Because legal fault assessment directly affects whether a defendant is held liable, and if so, for how much, this aspect of claims management is significant. We use accident data from the 1997 Insurance Research Council Closed Claim Survey to test for relationships between fault assessment and gender, age, and state comparative negligence rules. Controlling for actual fault, we find a greater assessment of fault against female, young, and elderly drivers. The results of the study are of interest to insurers seeking to provide better customer service, to consumer advocacy groups interested in claims settlement practices, and to insurance regulators.

Suggested Citation

  • Helen Doerpinghaus & Joan Schmit & Jason Jia‐Hsing Yeh, 2003. "Personal Bias in Automobile Claims Settlement," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 70(2), pages 185-205, June.
    • Handle: RePEc:bla:jrinsu:v:70:y:2003:i:2:p:185-205
    DOI: 10.1111/1539-6975.00055
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    Citations

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    Cited by:

    1. Yeh Jason Jia-Hsing, 2009. "Missing (Completely?) At Random: Lessons from Insurance Studies," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 3(2), pages 1-13, April.
    2. Mercedes Ayuso & Lluís Bermúdez & Miguel Santolino, 2011. "“Influence of the claimant’s behavioural features on motor compensation outcomes”," IREA Working Papers 201108, University of Barcelona, Research Institute of Applied Economics, revised Jun 2011.
    3. Ayuso, Mercedes & Santolino, Miguel, 2007. "Predicting automobile claims bodily injury severity with sequential ordered logit models," Insurance: Mathematics and Economics, Elsevier, vol. 41(1), pages 71-83, July.
    4. Scalera Domenico & Zazzaro Alberto, 2007. "The Unpleasant Effects of Price Deregulation in the European Third-Party Motor Insurance Market: A Theoretical Framework," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-30, October.
    5. Santolino, Miguel, 2010. "Determinants of the decision to appeal against motor bodily injury judgements made by Spanish trial courts," International Review of Law and Economics, Elsevier, vol. 30(1), pages 37-45, March.
    6. Xiao Lin & Mark J. Browne & Annette Hofmann, 2022. "Race discrimination in the adjudication of claims: Evidence from earthquake insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 89(3), pages 553-580, September.
    7. Dana A. Kerr, 2005. "The Effect of Ownership Structure on Insurance Company Litigation Strategy," The Journal of Legal Studies, University of Chicago Press, vol. 34(1), pages 273-294, January.
    8. Helen I. Doerpinghaus & Joan T. Schmit & Jason Jia‐Hsing Yeh, 2008. "Age and Gender Effects on Auto Liability Insurance Payouts," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 75(3), pages 527-550, September.
    9. Dana A. Kerr & Yu‐Luen Ma & Joan T. Schmit, 2009. "A Cross‐National Study of Government Social Insurance as an Alternative to Tort Liability Compensation," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 76(2), pages 367-384, June.

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