BEHIND THE WHEEL OF LEGAL INFLATION: MORE THAN $42.8B IN EXCESS AUTO TORT CASES UNCOVERED, NEW TRIPLE-I ANALYSIS FINDS

States News Service

The following information was released by the Insurance Information Institute:

An analysis published today by the Insurance Information Institute (Triple-I) revealed an estimated $42.8 billion in excess litigation value from motor vehicle tort cases filed between 2014 and 2023 in both federal and state civil courts across the United States.

Drawing on data from the Federal Judicial Center and a curated sample of state court systems, the study highlights a sharp rise in motor vehicle-related litigation and emphasizes how incomplete and inconsistent state-level civil court data hinders transparency and reform.

"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," said Triple-I CEO Sean Kevelighan. "Billboard attorneys and their billions spent on advertising to exploit and drive consumers toward litigation are not just annoying, they are making everyone victims of legal system abuse."

Key Federal Court Findings

Tort cases grew to 33.8% of all federal civil case filings in the period 2014 to 2023, up from 18.8% in the 1994 to 2003 period.

Motor vehicle tort filings rebounded sharply from previous declines, rising at a 4.9% compound annual growth rate (CAGR) from 2014 to 2023.

A majority of these cases (52.8%) were resolved through settlement, with just 7.4% resulting in a formal judgment.

The total excess value of federal court filings for motor vehicle torts is estimated at $984.6 million during this period.

State Court Insights

An estimated 5 million motor vehicle tort cases were filed in state civil courts from 2014 to 2023.

Based on extrapolated data from 18 states covering 62% of the U.S. population, the excess value in state courts is projected at $41.8 billion.

Cases in no-fault insurance states carried an average amount in controversy of $725,000, compared to $650,000 in other states.

Total National Impact

Combined, state and federal filings resulted in an estimated $42.8 billion in excess motor vehicle tort value, a reflection of mounting legal system pressures that are directly contributing to rising auto insurance costs.

"This study highlights how increasing tort litigation, particularly in the motor vehicle sector, is driving up insurance premiums," said Patrick Schmid, Ph.D., chief insurance officer at Triple-I. "We urgently need standardized, publicly accessible civil case data from all 50 states and Washington D.C. Transparency is essential for understanding and addressing the effects of legal system abuse on both consumers and insurers."

The findings reinforced previous research conducted by Triple-I and the Casualty Actuarial Society, which estimated $118.9 billion in combined economic and social inflation on auto liability insurance from 2014 to 2023.

About the Insurance Information Institute (Triple-I)

Since 1960, the Insurance Information Institute (Triple-I) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers serving regional, national and global markets.

About The Institutes

The Institutes are a global not-for-profit comprising 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.