How Georgia Can Embrace Florida's Legal Reforms to Stabilize Insurance Costs

Florida's Legal Reforms: A Blueprint for Georgia

Georgia, often cited as one of the 'Judicial Hellholes' by the American Tort Reform Foundation, could benefit significantly from adopting similar legal reforms as Florida. Sean Kevelighan, CEO of Triple-I, highlighted in a recent interview that Florida's 2022 legal reforms targeting excessive attorney fees and prohibiting assignment of benefits (AOB) have led to a stabilization in insurance costs. These reforms were enacted in response to the overwhelming 70% of national homeowners insurance litigation generated in Florida, despite the state accounting for only about 9% of total homeowners claims.

The Impact of Litigation on Insurance Costs

Litigation significantly drives up the costs and time to settle insurance claims. Kevelighan explained, "The price of insurance is the price of the risk. If you have a high-litigation area, that's risky, and it's going to be more expensive." Florida's reforms have shown a positive trend, with premium growth reduced and nine new property insurers entering the market in 2023. This trend is reflected in underwriting losses, which were much smaller in 2023 compared to recent years. Most Florida carriers have filed for no rate increases or even decreases this year.

Georgia's Need for Reform

Georgia, ranked as one of the least affordable states for auto insurance by the Insurance Research Council (IRC), is experiencing a similar surge in litigation. Plaintiffs' attorneys who profited from claim fraud in Florida have shifted their focus to Georgia due to its fewer and antiquated regulations. Kevelighan estimates that the GDP impact of legal system abuse in Georgia is around $13 billion annually. To combat this, the Triple-I has launched a campaign to educate consumers and advocate for tort reform, aiming to reduce the risk level and, consequently, the price levels of insurance.

For readers, it's crucial to stay informed about legislative changes and their potential impact on insurance costs. Engaging with educational campaigns and supporting reforms can help stabilize insurance markets and make coverage more affordable.