Atlanta (AP) – The field of Georgia Gov. Brian Kemp is simple: Putten Limits for lawsuits will stop rising insurance costs.
However, the reality is more complicated.
Changes can reduce liability insurance costs for companies and owners of commercial property. The evidence is mixed whether the large premium reductions for car and other types of insurance would stimulate. And some researchers say that efforts that limit lawsuits, often called unlawful reform, more than the profit of the insurers mentioned than the price of policy lowers.
“The net impact is that it really improves the profitability of the insurer,” said Tyler Leverty, a company professor who studies risks and insurance at the University of Wisconsin-Madison.
When Kemp reveals his proposals on Thursday, the Republican Governor will probably continue to lean on his argument that everyone’s insurance rates are increasing because unfair lawsuits increase and juries grant excessive damage.
The problem is Kemp’s top priority He would do that this year after promising the Georgia Chamber of Commerce take action And instead, a law has pushed data from the Georgia Insurance Commissioner John King in 2024.
King said that lawsuits are driving insurance companies to reduce coverage for retail companies, apartments, drivers and others. He said that business owners in areas who label insurers as a high crime belong to one of those who struggle the most. Companies that offer homes with a low income have also complained.
“Go to Southeast atlanta and talk to the small convenience owners who have to take out because they cannot find insurance,” said King.
Are unfair lawsuits and large jury prices real problems?
Some say that there is no evidence that a national process crisis encourages high insurance rates.
“I went looking for the data and I did not find it,” says Kenneth Klein, professor of law at the California Western School of Law. “It doesn’t mean it doesn’t happen. It means that we cannot document it. “
But Mike Iverson of Oakbridge Insurance and former president of the Independent Insurance Agents Association said that insurance companies keep predictability in determining the rates and how they can spread losses.
In a known case, a jury awarded a man almost $ 43 million after a shooting at a CFS parking space in Atlanta, with the argument that the company should have strengthened safety. In another case, a Jonesboro Mobile Home Park was instructed to pay $ 31 million to the daughter of a man who was shot and killed there.
Opponents note that few statements are that large and insurance companies are still profitable. They want the legislators to demand more transparency about how they determine rates.
“If they want an excuse to increase the rates or limit the coverage, they will always point to a judgment here and there and make all kinds of claims about how it influences their operating result,” said Joanne Doroshow, executive director of the Center for Justice & Democracy at New York Law School.
Investigating how unlawful reform of the reform of the tort in other states influences is difficult because other factors are involved and there are different reform combinations. Some saw benefits, but the research varies.
What drives rates?
Other factors that influence the insurance rates are inflation, extreme weather and the costs of labor and materials. It is normal for insurance markets to go through difficult years where less coverage is offered as the rates rise.
In many lines of coverage, including those who were not seriously affected by lawsuits, insurers were less profitable in Georgia in 2022 than in various other states, according to data from the National Association of Insurance Commissioners. However, a spokesperson said over a longer period, but nothing is abnormal about the fluctuations of Georgia.
The King report, with mainly car insurance data, says that the number of claims and the size of the resulting payments have risen over the years, especially those with lawsuits. Some figures fell in 2022 and 2023, but he said that was because the data is incomplete.
King also discovered that a larger percentage of the legal claims results in payments that achieve the maximum dollar amount that covers a policy.
The Georgia Trial Lawyers Association, which lobbys against unlawful reform, disputes King’s conclusions.
Risk adviser David Stegall said that the number of claims is in accordance with the large number of car accidents of Georgia. Both claims and payouts are usually stable or fall, especially when they are adapted for population growth and inflation, he said.
He also discovered that although residents of Georgia between 11% and 68% pay more for car insurance policies than residents of other states, they are more than 200% more likely to have an accident.
Adam Willis, president of transport company F&W Transportation, said that the premiums of his company have doubled over the past 10 years, while fewer insurers offer full coverage. His company has also been charged more often, he said.
Defenders of the current system say that the considerations of lawsuit limits are a bad deal.
“The governor says that limiting your right as a consumer will lower your insurance costs, but that is not just a bad idea for ordinary citizens, it’s just not correct,” says Rep. Tanya Miller, a democrat in Atlanta.
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Kramon is a member of the corps for the Associated Press/Report for America Statehouse News Initiative. Report for America is a non -profit National Service Program that places journalists in local newsrooms to report on undercovered issues. Follow Kramon on X: @charlottekramon.
