Americans See Link Between Attorney Involvement in Claims and Higher Auto Insurance Costs: IRC Report

Business Wire

MALVERN, Pa.--(BUSINESS WIRE)--
Widespread advertising by billboard attorneys to encourage consumers to hire a lawyer to settle an auto accident claim leads to higher costs of auto insurance across the U.S., according to the majority of respondents in a new report from the Insurance Research Council (IRC), an affiliate of The Institutes.

The IRC report, Public Opinions on Attorney Involvement in Claims, examined consumer opinions on attorney advertising and its perceived impact on the cost of auto insurance and legal behavior.

The national survey expanded on findings from past IRC studies on this issue. The 2024 survey showed 60% of respondents indicated attorney advertising increases the number of auto claims (up from 55% in the 2021 IRC survey). Additionally, 52% of respondents feel that attorney advertising increases the cost of their auto insurance (up from 45% in 2021).

“Attorney advertising is a significant part of the legal landscape, particularly in auto injury insurance claims,” said Dale Porfilio, FCAS, MAAA, president of IRC and chief insurance officer at the Insurance Information Institute (Triple-I).

“Most respondents believe that attorney advertising increases auto insurance costs by encouraging more legal involvement, which leads to higher claim settlements and legal expenses,” Porfilio added.

Other key findings from the 2024 IRC attorney involvement consumer survey included:

Most respondents (89%) reported seeing attorney advertising in the past year, up 8 percentage points from 2021.
Almost half of those surveyed reported seeing an increase in the amount of attorney advertising.
Notably, those with recent claim experience were most likely to report an increase in attorney advertising (62% of respondents) compared with 42% of those who had not filed a claim in the last three years.
The most frequently reported type of legal ad, by a large margin, targeted injuries from auto accidents. Almost two-thirds (63%) of respondents who mentioned seeing or hearing attorney advertisements cited this type.

“The survey also showed there has been a significant increase in awareness and understanding of third-party litigation financing (TPLF) since the IRC first posed the question in 2016,” Porfilio said. More importantly, the survey showed very strong support for transparency when outside investors are involved in litigation, with only 4% opposed.

About Insurance Research Council

The Insurance Research Council (IRC), affiliated with The Institutes, is an independent, nonprofit research organization supported by leading property and casualty insurance companies and associations. IRC provides timely and reliable research to all parties involved in public policy issues affecting insurance companies and their customers. IRC does not lobby or advocate legislative positions.

About The Institutes

The Institutes are a not-for-profit comprised of diverse affiliates that educate, elevate, and connect people in the essential disciplines of risk management and insurance. Through products and services offered by The Institutes nearly 20 affiliated business units, people and organizations are empowered to help those in need with a focus on understanding, predicting, and preventing losses to create a more resilient world.