A detailed analysis of no-fault motor insurance in the U.S. and the pros and cons of applying it to Malta

Abstract

This dissertation sets out to identify a different approach of how to insure motor vehicles whereby a motor insurance policy would be cheaper to buy, cheaper for the insurer to manage and provides same level of cover but incorporates a faster indemnification process. This is first done by providing a study of No-Fault Motor Insurance in the U.S. Early feedback shows that U.S. customers were satisfied with such approach but as time went by, insurers were still incurring high costs which theoretically shouldn't have happened. This lead to a study of the factors which may have led to such increase in costs which results that such unanticipated costs were being incurred because insurers under No-Fault simply were proving a better service in terms of compensation and time required to compensate such victims. At the same time victims were taking the liberty to make the best use of medical services under their policy which was another major factor why insurers were incurring such costs. The next part of this dissertation sets to identify the local situation of motor insurance in Malta where a survey to owners of motor vehicles was handed out. Findings show that insurance clients are always looking for something more cheaper to buy yet more efficient thus they were interested in getting to know more about the No-Fault Concept. Conclusions reached were that should No-Fault be established as another system of how to insure motor vehicles, current insurers should stick to Fully Comprehensive which may reflect in a loss of turnover in its early stages but should bring more stability to the insurance sector as well better customer satisfaction.