Understanding the Rising Concerns of Insurance Affordability in Georgia

Triple-I's Campaign to Highlight Legal System Abuse

The Insurance Information Institute (Triple-I) has launched a comprehensive campaign in Georgia to raise awareness about the challenges of insurance affordability, particularly due to legal system abuse. The campaign includes billboards along Interstate 20 in Downtown Atlanta and digital displays at bus stops and other urban locations across Metro Atlanta. Georgia has been labeled a 'judicial hellhole' by the American Tort Reform Foundation (ATRF) due to high nuclear verdicts and liability-expanding decisions by the Georgia Supreme Court. This legal environment has led to increased litigation costs for insurers, which in turn affects insurance affordability for consumers.

Impact of Attorney Involvement on Insurance Costs

Data from the Insurance Research Council (IRC) shows that attorney involvement in insurance claims can significantly increase costs and prolong the resolution time, even though it may reduce the value for claimants. For instance, auto insurance litigation is a growing concern in Georgia, where coverage affordability has been declining faster than in any other state. According to an IRC report, Georgia ranks 47th in auto insurance affordability, with personal auto insurance expenditures accounting for 2.0 percent of Georgians' median household income, compared to 1.5 percent nationwide. The annualized growth rate of auto insurance spending in Georgia was 5.6 percent between 2014 and 2022, compared to 3.3 percent nationally.

The Role of Advertising in Increasing Litigation

Legal service providers spent over $160 million on advertising in Georgia in 2023, according to the American Tort Reform Association (ATRA). This advertising spend is believed to contribute to the rise in lawsuit filings, as trial attorneys and third-party litigation funders seek profits from high-payout cases at the expense of policyholders. A Triple-I study found that increasing inflation drove loss and defense containment costs higher in both personal and commercial auto insurance lines. Triple-I's campaign aims to educate Georgians about these mounting costs and to engage stakeholders in addressing the risk crisis.

To better understand and address these issues, it is crucial for consumers to stay informed about the factors affecting their insurance premiums. Engaging with industry experts, participating in discussions, and following reliable sources of information can help consumers make informed decisions and advocate for more affordable insurance options.