Report finds 'litigation in auto insurance claims is a growing concern in Georgia amid rising costs'

The Insurance Research Council (IRC) recently released a report highlighting the rising financial burden of auto insurance in Georgia, which now ranks among the least affordable states. In 2022, Georgia's auto insurance costs represented 2.0 percent of median household income, compared to the national average of 1.5 percent. This places Georgia 47th in affordability, with only four states performing worse.

The August report notes that litigation in auto insurance claims is a growing concern in Georgia, especially as tort reform in neighboring states appears to be encouraging legal firms to seek opportunities in Georgia. The state has seen a surge in legal claims and attorney advertising. The American Tort Reform Association (ATRA) reported that local spending on legal service ads reached over $160 million in 2023, nearly 40 percent higher than in 2019. Georgia now ranks first on ATRA’s list of problematic litigation environments.

The IRC report points out that Georgia’s litigation rate is more than double the national median, contributing to higher injury claim rates and legal costs. Residents file accident-related injury claims 60 percent more frequently than the U.S. average, with uninsured and underinsured motorist rates also above national levels. These legal trends, combined with slower income growth, have driven up costs for consumers, with an annualized increase of 5.6 percent in auto insurance expenditures from 2014 to 2022, surpassing the national average.

The report warns that rising costs and ongoing litigation could lead to a long-term affordability crisis for personal auto insurance in Georgia. Addressing these legal and economic factors is seen as crucial for maintaining access to affordable insurance for all residents.

According to a report by the Insurance Information Institute (Triple-I), insurance abuse costs each Georgia resident $1,372 per year and contributes to the loss of over 137,000 jobs annually. Additionally, ATRA has ranked Georgia the #1 "Judicial Hellhole" in the U.S. for both 2023 and 2024, citing excessive litigation and a challenging legal climate for businesses and insurers.