By Lewis Nibbelin, Contributing Author, Triple-I
Georgia – incessantly featured on the American Tort Reform Basis’s checklist of “Judicial Hellholes” – could need to think about imitating its neighbor Florida in pursuing authorized system abuse reforms, Triple-I CEO Sean Kevelighan instructed in a current interview for WBS Information/Discuss Radio.
In 2022 – the 12 months Class 4 Hurricane Ian tore by means of the southeast United States – over 70 % of all owners insurance coverage litigation nationally was generated in Florida, when the state accounted for under about 9 % of whole owners claims.
“We truly 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 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 worth of insurance coverage is the worth of the danger,” 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 12 months, Kevelighan mentioned.
Below 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 lately. 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 rapidly, with some trade specialists suggesting the market might 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 and marketing to states with fewer and/or antiquated laws – particularly Georgia, 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 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 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, at the same time as trial attorneys within the state invested tons of of hundreds of thousands into promoting in 2023.
A new IRC survey helps a constructive correlation between customers who seek the advice of attorneys and those that 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 courtroom 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 comparable legal guidelines in different areas. To advocate for tort reform in Georgia, the Triple-I lately launched a multi-faceted marketing campaign that features freeway and digital bus shelter billboards selling an academic client web site.
“We need to inform customers that litigation doesn’t should be a primary step in declare disputes, however needs to be extra of a final resort,” Kevelighan mentioned. “We’re making an attempt 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 worth ranges.”
Georgia Gov. Brian Kemp’s curiosity in addressing tort reform through 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 will likely be a significant subject of dialog.
Study Extra:
Georgia Is Among the many Least Reasonably priced States for Auto Insurance coverage