Tort Reform in Georgia: Weighing the Impact on Insurance Costs
Introduction
Georgia Governor Brian Kemp proposes limiting lawsuits to curb rising insurance premiums. However, experts debate the effectiveness of tort reform on insurance costs.
Evidence on Tort Reform
* Some studies suggest a reduction in liability insurance costs for businesses and property owners.
* Mixed evidence on whether it significantly lowers car and other insurance premiums.
* Critics argue that tort reform primarily benefits insurers, not policyholders.
Kemp's Proposed Reforms
* Kemp emphasizes combating unfair lawsuits and excessive jury awards as drivers of insurance rate increases.
* Insurance Commissioner John King cites reduced coverage for businesses and individuals due to high lawsuits.
Opposing Views
* Some experts claim insufficient evidence to support a nationwide litigation crisis driving insurance rates.
* Insurance companies prioritize predictability in rate-setting and loss distribution.
* Opponents call for transparency in insurance rate-setting practices.
Factors Influencing Insurance Rates
* Other factors, such as inflation, weather, and material costs, also affect insurance premiums.
* Georgia insurance companies experienced lower profitability than other states in 2022 in certain coverage lines.
Data from Insurance Commissioner
* King's report highlights an increase in insurance claims and payments, especially those involving lawsuits.
* Critics question the validity of this data, citing incomplete information.
Industry Perspective
* Risk consultant David Stegall argues that claims and payouts have remained stable or declined, adjusted for population growth and inflation.
* Trucking firm F&W Transportation reports increased premiums and fewer insurers offering full coverage.
Counterarguments
* Rep. Tanya Miller believes tort reform compromises consumer rights without significantly lowering insurance costs.