In order to remedy the problem of burdensome tort costs and mounting fraud in car insurance premiums, Michael Horowitz of the Hudson Institute and Jeffrey O'Connell of the University of Virginia Law School have proposed a system commonly referred to as "auto-choice."[10] Simply stated, auto-choice unbundles the premium for economic losses[11] and for pain and suffering[12] losses. In addition, automobile insurance would be primarily shifted to a first party basis, where each driver's own insurance pays for his or her damages.

      Under the proposed system of auto-choice, individuals would have a choice between two general types of policies. On the one hand, individuals could opt to retain the same basic rights they now have under existing state law by purchasing "tort maintenance" coverage (TM). With TM, drivers recover damages, both economic and pain and suffering, from their own insurance carrier up to the limits of their policy based on who was at fault in the accident. However, if economic damages exceed that limit, then injured parties can sue negligent drivers for economic damages in amounts that exceed their own insurance coverage. In all cases, each state's definition of economic damages, as well as each state's existing negligence law doctrines, would remain mostly unchanged.