By Lewis Nibbelin, Contributing Author, Triple-I
The Georgia Senate lately authorised laws aimed toward curbing the state’s hovering litigation. Backed by Georgia Gov. Brian Kemp, Senate Invoice 68 is designed to facilitate extra equitable courtroom outcomes and stabilize insurance coverage charges.
Amongst different provisions, the invoice features a cap on ache and struggling proof that would scale back premises legal responsibility lawsuits, or these towards homeowners for accidents and/or legal conduct that occurred on their property. It additionally would limit “phantom damages,” which means plaintiffs may search damages solely within the quantity truly paid for medical payments, moderately than an inflated quantity decided by a healthcare supplier’s checklist costs.
Each practices have generated nuclear verdicts (awards of $10 million or extra) in Georgia, contributing to the fourth-most nuclear verdicts in private harm litigation per capita of any state from 2013 to 2022.
One other invoice – SB 69 – targets third-party litigation funding, wherein buyers anonymously finance litigation and infrequently delay immediate settlement in trade for a share of bigger harm awards, thereby driving up claims prices. If enacted, the invoice would restrict their affect over authorized choices and require third events to register with the Division of Banking and Finance, successfully banning international adversaries from funding litigation.
A lot of the laws relies on a report from the workplace of Georgia Insurance coverage and Security Hearth Commissioner John F. King, which revealed a gradual improve in legal responsibility claims frequency and recognized rising authorized involvement in claims as a key driver of insurance coverage charges.
“Georgia’s authorized local weather quantities to a hidden tax on households and small companies, driving up prices and threatening our long-term future,” King stated in a current press convention, explaining that tort reform can “degree the enjoying area in our courtrooms and assist guarantee Georgia’s long-term prosperity and safety.”
Financial influence on Georgia
Georgia loses over 137,000 jobs yearly on account of extreme litigation, which additional imposes an estimated $1,415 “tort tax” on every resident per yr, incomes the state a recurring spot on the American Tort Reform Basis’s annual checklist of “judicial hellholes.” With litigation for private auto claims at a price greater than twice that of the median state, Georgia additionally ranks among the many least reasonably priced states for private auto insurance coverage, in accordance with analysis by the Insurance coverage Analysis Council (IRC) – an affiliate of The Institutes, like Triple-I.
To bolster stakeholder schooling on the financial impacts of authorized system abuse, Triple-I lately expanded its complete consciousness marketing campaign in Georgia. The marketing campaign now encompasses a number of brick-and-mortar interstate billboards in Downtown Atlanta, together with digital bus shelter billboards throughout the Metro Atlanta space. All billboards promote Triple-I’s microsite encouraging shopper help for reform within the state.
Although a whole bunch – together with medical doctors and enterprise homeowners – have galvanized behind the reforms, neither invoice is with out controversy. Opponents argue such laws might not enhance insurance coverage charges and will overcorrect to favor insurance coverage corporations on the expense of policyholders.
Following reforms in 2022 and 2023, nevertheless, Florida welcomed flat or decreased insurance coverage charges final yr, because the state’s insurance coverage market started to get better from its former standing because the “poster baby” for authorized system abuse. Substantial price reductions have continued into 2025, notably for 3 main auto insurance coverage carriers, in accordance with Florida Gov. Ron Desantis’ announcement earlier this month.
Whereas the particular coverage levers might differ, Florida’s success fashions the potential advantages of comparable laws in different areas. Definitely, understanding and mitigating these developments is essential to restoring Georgia’s economic system.
Study Extra:
How Georgia May Study From Florida Reforms
Georgia Is Among the many Least Inexpensive States for Auto Insurance coverage