Georgia Republicans push to limit lawsuits. But would that keep insurance rates from rising?

By Charlotte Kramon

ATLANTA (AP) — The pitch from Georgia Gov. Brian Kemp is simple: Putting limits on lawsuits will halt rising insurance costs.

The reality, though, is more complicated.

Changes could reduce liability insurance costs for businesses and commercial property owners. The evidence is mixed on whether it would drive large premium reductions for car and other types of insurance. And some researchers say efforts limiting lawsuits, often called tort reform, fattens insurers’ profits more than it cuts the price of policies.

“The net impact is that it really improves insurer profitability,” said Tyler Leverty, a business professor who studies risk and insurance at the University of Wisconsin-Madison.…

Are unfair lawsuits and big jury awards real problems?

Some say there’s no evidence that a nationwide litigation crisis is driving high insurance rates.

“I went in search of the data, and I have not found it,” said Kenneth Klein, a law professor at California Western School of Law. “It’s not to say it isn’t happening. It’s to say we cannot document it.”

But Mike Iverson of Oakbridge Insurance and former president of the Independent Insurance Agents Association said insurance companies like predictability when determining rates and how to spread out losses.

In a well-known case, a jury awarded a man almost $43 million after a shooting in a CVS parking lot in Atlanta, arguing the company should have strengthened security. In another case, a Jonesboro mobile home park was ordered to pay $31 million to the daughter of a man who was shot and killed there.

Opponents note that few verdicts are that large and insurance companies are still profitable. They want lawmakers to demand more transparency on how they set rates.

“Whenever they want an excuse to raise rates or limit coverage they will always point to a verdict here and there and make all kinds of claims about how it’s affecting their bottom line,” said Joanne Doroshow, executive director of the Center for Justice & Democracy at New York Law School.

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