By Lewis Nibbelin, Contributing Author, Triple-I
Georgia – steadily featured on the American Tort Reform Basis’s listing of “Judicial Hellholes” – could wish to take into account 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 12 months 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 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 focusing on extreme one-way legal professional charges and prohibiting task 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 value of insurance coverage is the value of the danger,” Kevelighan defined. “When you have a high-litigation space, that’s dangerous, and it’s going to be dearer.”
Expensive, 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, decreasing premium progress and attracting 9 new property insurers to the market this 12 months, Kevelighan mentioned.
Underneath these reforms, “the danger degree is getting decrease and that enables the price of insurance coverage to go down,” he mentioned. 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 price will increase – and even decreases – this 12 months, Kevelighan mentioned.
Although Hurricanes Helene and Milton will doubtless constrain Florida’s 2024 underwriting profitability, insurers are well-equipped to settle claims extra shortly, with some business 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 reasonably priced 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 techniques – which “anchor” juries to extraordinary non-economic harm awards as a baseline – propel Georgia’s abnormally excessive price 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 12 months, whilst trial attorneys within the state invested tons of 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 people who are uncovered to legal professional promoting. Although most customers consider 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 court docket 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 related 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 wish to inform customers that litigation doesn’t should be a primary step in declare disputes, however must be extra of a final resort,” Kevelighan mentioned. “We’re attempting to assist elevate consciousness in order that reform does go, 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 throughout the 2025 Georgia Basic Meeting guarantees “extra motion,” Kevelighan added.
It’s not too late to register for Triple-I’s “Joint Business Discussion board” in Miami November 19th and 20th, the place authorized system abuse will likely be a serious matter of dialog.
Study 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. Customers See Hyperlink Between Legal professional Involvement in Claims and Greater Auto Insurance coverage Prices: New IRC Report
