By Lewis Nibbelin, Contributing Writer, Triple-I
The Georgia Senate just lately accepted laws geared toward curbing the state’s hovering litigation. Backed by Georgia Gov. Brian Kemp, Senate Bill 68 is designed to facilitate extra equitable courtroom outcomes and stabilize insurance coverage charges.
Among 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 prohibit “phantom damages,” which means plaintiffs may search damages solely within the quantity really paid for medical payments, quite than an inflated quantity decided by a healthcare supplier’s record costs.
Both practices have generated nuclear verdicts (awards of $10 million or extra) in Georgia, contributing to the fourth-most nuclear verdicts in private damage litigation per capita of any state from 2013 to 2022.
Another invoice – SB 69 – targets third-party litigation funding, through which traders anonymously finance litigation and infrequently delay immediate settlement in trade for a share of bigger injury 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 Department of Banking and Finance, successfully banning overseas adversaries from funding litigation.
Much of the laws is predicated on a report from the workplace of Georgia Insurance and Safety Fire Commissioner John F. King, which revealed a gentle improve in legal responsibility claims frequency and recognized rising authorized involvement in claims as a key driver of insurance coverage charges.
“Georgia’s legal climate amounts to a hidden tax on families and small businesses, driving up costs and threatening our long-term future,” King mentioned in a current press convention, explaining that tort reform can “level the playing field in our courtrooms and help ensure Georgia’s long-term prosperity and security.”
Economic impression on Georgia
Georgia loses over 137,000 jobs yearly as a consequence 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 Foundation’s annual record of “judicial hellholes.” With litigation for private auto claims at a charge greater than twice that of the median state, Georgia additionally ranks among the many least reasonably priced states for private auto insurance coverage, in response to analysis by the Insurance Research Council (IRC) – an affiliate of The Institutes, like Triple-I.
To bolster stakeholder training on the financial impacts of authorized system abuse, Triple-I just 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.
Though a whole bunch – together with docs 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 firms on the expense of policyholders.
Following reforms in 2022 and 2023, nonetheless, Florida welcomed flat or decreased insurance coverage charges final yr, because the state’s insurance coverage market started to get well from its former standing because the “poster child” for authorized system abuse. Substantial charge reductions have continued into 2025, significantly for 3 main auto insurance coverage carriers, in response to Florida Gov. Ron Desantis’ announcement earlier this month.
While the particular coverage levers might differ, Florida’s success fashions the potential advantages of comparable laws in different areas. Certainly, understanding and mitigating these tendencies is essential to restoring Georgia’s financial system.
Learn More:
New Triple-I Issue Brief Puts the Spotlight on Georgia’s Insurance Affordability Crisis
How Georgia Might Learn From Florida Reforms
Triple-I launches Campaign to Highlight Challenges to Insurance Affordability in Georgia
Georgia Is Among the Least Affordable States for Auto Insurance