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 Insurance Insights

Why Should You Be Interested In Tort Reform?

2/18/2025

 
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With insurance premiums having risen significantly over the past several years, increased attention has been directed on neutralizing climbing costs.

One effort that has gained attention for slowing and reducing these costs is tort reform.  Tort reform refers to a set of changes to civil justice laws to reduce the number and cost of lawsuits.

Evidence indicates that implementing tort reforms can help lower insurance premiums for both individuals and businesses.  When insurance companies face lower costs from lawsuits and settlements, they can pass those savings on to customers through reduced premiums.

Georgia has implemented tort reforms in phases, with significant legislation in 2005, additional measures through 2023, and continual refinements since then.
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How have past tort reform efforts regarding insurance premiums in Georgia fared?  Here's a recap: 
Numerous changes have been successful, for example:
  • placing caps on non-economic damages (i.e., pain and suffering)
  • paying damages proportionate to their responsibility of fault (vs, disproportionately high values)
  • requiring expert certification that the case has merit before filing certain types of lawsuits

What specific impact have they had on home and auto insurance premiums?

Auto Insurance Effects
  • Average auto insurance premiums decreased between 2020-2023 following litigation reforms.
  • Claims processing time were reduced due to streamlined procedures.
  • Bad faith claim filings dropped significantly after implementing new standards for such cases.
  • Direct-to-consumer settlements increased, reducing legal costs.

Homeowners Insurance Results
  • Average premium growth slowed annually, and was much lower compared to neighboring states.
  • Weather-related litigation costs decreased under new filing requirements.
  • Property damage claim resolution time improved.
  • Insurance availability increased in previously high-risk areas.

Georgia continues to hone its tort reform approach, and Governor Kemp has introduced a tort reform package for the 2025 legislative session via Senate bills 68 and 69.

Similar to prior legislation, these bills aim at reducing frivolous law suits and placing caps on damages that can be awarded while still balancing the need to maintain access to legal remedies for legitimate claims.

Remember, this is just one way to reduce the cost or your insurance coverage.  There are other things YOU can do to help keep your premiums in check.  Give me a call today to see how I can help you with them:  706-726-1446.

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    Dennis Lam

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