By Lewis Nibbelin, Contributing Author, Triple-I
Georgia – ceaselessly featured on the American Tort Reform Basis’s listing of “Judicial Hellholes” – might wish to contemplate imitating its neighbor Florida in pursuing authorized system abuse reforms, Triple-I CEO Sean Kevelighan instructed in a current interview for WBS Information/Speak Radio.
In 2022 – the yr Class 4 Hurricane Ian tore by the southeast United States – over 70 p.c of all householders insurance coverage litigation nationally was generated in Florida, when the state accounted for less than about 9 p.c of complete householders claims.
“We really noticed six insurers go bancrupt even earlier than Ian hit,” Kevelighan mentioned.
An exodus of insurance coverage carriers, paired with an estimated $10 billion loss in post-Ian litigated claims, prompted Florida policymakers to enact legal guidelines concentrating on extreme one-way lawyer charges and prohibiting project of advantages (AOB) to curtail gratuitous or fraudulent litigation.
Authorized system abuse drives up prices for everybody
Such litigation will increase the prices and time to settle insurance coverage claims, which insurers should account for when predicting loss tendencies and setting charges.
“The value of insurance coverage is the worth of the chance,” Kevelighan defined. “If in case you have a high-litigation space, that’s dangerous, and it’s going to be costlier.”
Pricey, protracted claims disputes – particularly ones involving pointless judicial intervention – can outprice customers and insurers, main many to stop providing protection within the state or to declare insolvency.
Insurance coverage prices in Florida have stabilized since legislators handed authorized system abuse reforms in 2022 and 2023, lowering premium progress and attracting 9 new property insurers to the market this yr, Kevelighan mentioned.
Beneath these reforms, “the chance degree is getting decrease and that enables the price of insurance coverage to go down,” he mentioned. Underwriting losses in 2023 mirrored this pattern, as Florida’s property insurance coverage market recorded a a lot smaller loss than in recent times. Most Florida carriers have filed for no charge will increase – and even decreases – this yr, Kevelighan mentioned.
Although Hurricanes Helene and Milton will seemingly constrain Florida’s 2024 underwriting profitability, insurers are well-equipped to settle claims extra shortly, with some trade specialists suggesting the market may sufficiently cowl one other hurricane later this season.
Classes for Georgia
Plaintiffs’ attorneys who profited from declare fraud in Florida have transferred their exploitative practices and billboard advertising to states with fewer and/or antiquated rules – particularly Georgia, not too long ago ranked one of many least inexpensive states for auto insurance coverage by the Insurance coverage Analysis Council (IRC), a division of The Institutes.
“The litigation is simply creeping throughout the border into Georgia,” he mentioned. “It’s estimated that the GDP of authorized system abuse impacts the financial system about $13 billion yearly in Georgia alone.”
In Georgia, Kevelighan mentioned, unfettered anchoring ways – which “anchor” juries to extraordinary non-economic injury awards as a baseline – propel Georgia’s abnormally excessive charge of extreme verdicts.
Profuse and inflated litigation impedes protection affordability and availability and creates undue “tort taxes” that value particular person Georgians $1,372 per yr, at the same time as trial attorneys within the state invested lots of of tens of millions into promoting in 2023.
A brand new IRC survey helps a optimistic correlation between customers who seek the advice of attorneys and people who are uncovered to lawyer promoting. Although most customers consider this promoting will increase the price of auto insurance coverage, most additionally stay neutral. Better public outreach and tort reform are wanted to cease and forestall authorized system abuse.
Whereas amending a court docket system hostile to defendants requires in depth coordinated efforts, Florida’s current legislative reforms have already improved the state’s insurance coverage panorama, demonstrating the efficacy of passing related legal guidelines in different areas. To advocate for tort reform in Georgia, the Triple-I not too long ago launched a multi-faceted marketing campaign that features freeway and digital bus shelter billboards selling an academic shopper web site.
“We wish to inform customers that litigation doesn’t have to be a primary step in declare disputes, however ought to be extra of a final resort,” Kevelighan mentioned. “We’re making an attempt to assist increase consciousness in order that reform does cross, and that we will scale back the chance degree, in order that we will scale back the worth ranges.”
Georgia Gov. Brian Kemp’s curiosity in addressing tort reform in the course of the 2025 Georgia Normal Meeting guarantees “extra motion,” Kevelighan added.
It’s not too late to register for Triple-I’s “Joint Trade Discussion board” in Miami November 19th and 20th, the place authorized system abuse can be a significant subject of dialog.
Be taught Extra:
Triple-I Launches Marketing campaign to Spotlight Challenges to Insurance coverage Affordability in Georgia
Georgia Is Among the many Least Inexpensive States for Auto Insurance coverage
U.S. Shoppers See Hyperlink Between Legal professional Involvement in Claims and Greater Auto Insurance coverage Prices: New IRC Report
