This article presents a rigorous analysis of no-fault automobile insur
ance in terms of stochastic dominance theory. In the baseline case, wi
th identical drivers and actuarially fair insurance, no-fault is stoch
astically dominant as long as the no-fault insurance premium exceeds t
he tort premium. In this case, no-fault brings a higher proportion of
accident costs under insurance, increasing driver welfare. When expens
e charges are introduced (actuarially unfair insurance) no-fault may s
till be stochastically dominant if the expense charge is less under no
-fault, even if no-fault weakens incentives for good driving and leads
to higher accident rates. Elective no-fault is unlikely to reduce aut
o insurance costs, because drivers with high propensities toward moral
hazard are likely to retain their fight to sue by choosing tort.