Insurance Information Institute reports $42.8B excess in auto tort cases

An analysis by the Insurance Information Institute Inc (Triple-I) has identified over $42.8 billion in excess litigation value from motor vehicle tort cases filed between 2014 and 2023 in U.S. federal and state courts. The study utilized data from the Federal Judicial Center and a sample of state court systems, highlighting a significant increase in motor vehicle-related litigation.

Sean Kevelighan, CEO of Triple-I, said, "Triple-I's latest research uses data to illustrate that the big business of U.S. law is only getting bigger, and it’s increasing insurance costs for all Americans." He criticized the influence of "billboard attorneys" on rising litigation rates.

The report found that tort cases constituted 33.8% of all federal civil case filings from 2014 to 2023, compared to 18.8% between 1994 and 2003. Motor vehicle tort filings increased at a compound annual growth rate of 4.9% during this period. Most cases were settled, with only 7.4% reaching formal judgment, leading to an estimated $984.6 million in excess value for federal court filings.

In state courts, approximately five million motor vehicle tort cases were filed over the same period. Extrapolated data from states covering 62% of the U.S. population suggests an excess value of $41.8 billion in these courts.

Patrick Schmid, Ph.D., chief insurance officer at Triple-I, emphasized the need for standardized civil case data across all states to address legal system abuses impacting consumers and insurers: "This study highlights how increasing tort litigation, particularly in the motor vehicle sector, is driving up insurance premiums."

Previous research by Triple-I and the Casualty Actuarial Society indicated $118.9 billion in combined economic and social inflation on auto liability insurance from 2014 to 2023.

Information from this article can be found here.