By Lewis Nibbelin, Contributing Author, Triple-I
Georgia – continuously featured on the American Tort Reform Basis’s record of “Judicial Hellholes” – could need to contemplate imitating its neighbor Florida in pursuing authorized system abuse reforms, Triple-I CEO Sean Kevelighan instructed in a latest interview for WBS Information/Speak Radio.
In 2022 – the yr Class 4 Hurricane Ian tore by means of the southeast United States – over 70 p.c of all householders insurance coverage litigation nationally was generated in Florida, when the state accounted for under about 9 p.c of whole householders claims.
“We really noticed six insurers go bancrupt even earlier than Ian hit,” Kevelighan stated.
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 developments and setting charges.
“The worth of insurance coverage is the value of the danger,” Kevelighan defined. “When you’ve got 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 development and attracting 9 new property insurers to the market this yr, Kevelighan stated.
Beneath these reforms, “the danger degree is getting decrease and that enables the price of insurance coverage to go down,” he stated. Underwriting losses in 2023 mirrored this development, as Florida’s property insurance coverage market recorded a a lot smaller loss than in recent times. Most Florida carriers have filed for no fee will increase – and even decreases – this yr, Kevelighan stated.
Although Hurricanes Helene and Milton will possible constrain Florida’s 2024 underwriting profitability, insurers are well-equipped to settle claims extra rapidly, 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 laws – particularly Georgia, just lately 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 stated. “It’s estimated that the GDP of authorized system abuse impacts the economic system about $13 billion yearly in Georgia alone.”
In Georgia, Kevelighan stated, unfettered anchoring ways – which “anchor” juries to extraordinary non-economic harm awards as a baseline – propel Georgia’s abnormally excessive fee 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 a whole lot of hundreds of thousands into promoting in 2023.
A brand new IRC survey helps a constructive correlation between customers who seek the advice of attorneys and those that are uncovered to lawyer promoting. Although most customers imagine this promoting will increase the price of auto insurance coverage, most additionally stay neutral. Larger public outreach and tort reform are wanted to cease and stop authorized system abuse.
Whereas amending a courtroom system hostile to defendants requires intensive coordinated efforts, Florida’s latest legislative reforms have already improved the state’s insurance coverage panorama, demonstrating the efficacy of passing comparable legal guidelines in different areas. To advocate for tort reform in Georgia, the Triple-I just lately launched a multi-faceted marketing campaign that features freeway and digital bus shelter billboards selling an academic shopper web site.
“We need to inform customers that litigation doesn’t must be a primary step in declare disputes, however must be extra of a final resort,” Kevelighan stated. “We’re making an attempt to assist increase consciousness in order that reform does cross, and that we will cut back the danger degree, in order that we will cut back the value ranges.”
Georgia Gov. Brian Kemp’s curiosity in addressing tort reform in the course of the 2025 Georgia Basic Meeting guarantees “extra motion,” Kevelighan added.
It’s not too late to register for Triple-I’s “Joint Trade Discussion board” in Miami November nineteenth and twentieth, the place authorized system abuse will probably be a serious subject of dialog.
Study Extra:
Triple-I Launches Marketing campaign to Spotlight Challenges to Insurance coverage Affordability in Georgia
Georgia Is Among the many Least Reasonably priced States for Auto Insurance coverage
U.S. Customers See Hyperlink Between Lawyer Involvement in Claims and Larger Auto Insurance coverage Prices: New IRC Report
