Legal system abuse adding to auto insurance costs: Triple-I

Insurance Information Institute (Triple-I) released Legal System Abuse–State of the Risk. The brief highlights how excessive litigation is adding to rising auto insurance costs. 

Triple-I defines legal system abuse as policyholder or plaintiff attorney practices that increase the cost and time to settle insurance claims. 

Sean Kevelighan, CEO at Triple-I, said in a statement: “There are real costs behind what we all know and see plaguing our roads with promises of settlement dollars, as billboard attorneys are racking up fees, and consumers are found to be getting less and less. 

“The price of insurance is the effect, not the cause of risk, and there must be more work done to curb legal system abuse, as auto insurers – both personal and commercial – are seeing significant increases in claims costs when attorneys enter into the picture.”

Insurers, last year on average, paid out $1.10 for every $1 of premium collected. The brief suggested the key drivers of incurred losses, beyond inflation and litigation costs, include expanding definitions of liability and systemic issues.