Americans' insurance rates are soaring and lawsuits play a significant role
San Diego County supervisor Jim Desmond criticizes California’s insurance regulations implemented prior to the Los Angeles County wildfires on ‘The Bottom Line.’
Americans' home and auto insurance rates have been soaring for years, with inflation, mounting losses from natural disasters, and rising repair and construction costs all playing a role.
But the industry points to a significant driver behind accelerating premiums that often goes overlooked: the mounting lawsuits and payouts that cost insurers.
The APCIA says the average American pays a $4,200 «tort tax» due to rising costs associated with abuse of the legal system. (iStock / iStock)
David Sampson, president and CEO of the American Property Casualty Insurance Association (APCIA), told FOX Business that even with all the pressures the industry is currently facing with huge losses due to hurricanes and wildfires, insurance regulatory dysfunction in some states, and the threat of tariffs driving up costs further, «Our number one priority is still addressing legal system abuse, because it is the major cost driver that's having a huge negative impact on insurance availability and affordability.»
The APCIA says the American household pays more than a $4,200 «tort tax» due to unnecessary and abusive litigation across the country that raises the costs of products and services like groceries and gas.
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The insurance trade group shows data indicating the average personal injury verdict has ballooned over the last decade or more, going from around $39,300 in 2010 to more than $125,300 in 2020 – a 319% increase.
The APCIA points to data showing the median personal injury award in the U.S. more than
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