Lower Delivery Cost . When compared with the current tort liability system, insurance delivers a greater percentage of collected funds to cleanup or compensation. The average fund distribution for delivering compensation to asbestos injury claimants through the tort liability system was approximately 40 percent of total funds collected. The studies of UST funds suggest that insurance is also likely to be more efficient than government benefit programs. The underfunding of UST state funds and the expenditure of a significant portion of the funds to pay debt servicing make the delivery of cleanup money from those funds just as costly as the tort system.
Insurance provides better risk management for less.
Insurance values efficiency over equity, for example, works best with limited types of risks, and must be marketable to be effective. Efficiency over Equity . Unlike government benefit programs, insurers must be able to discriminate among groups of insureds to be effective. The subsidization of UST owners and victims of flood or earthquake by all taxpayers is the direct result of a uniform compensation approach that does not discriminate among risks. Insurance, by way of contrast, charges higher premiums to those with higher risk profiles and does not insure some risks at all.