Most Consumers Aware and Worried How Litigation Increases Insurance Cost

Most insurance consumers (64.3%) are worried that lawsuits increase their premiums, and an even larger majority of consumers think the legal system is being used in ways that drive up insurance costs, according to a new survey from the Independent Insurance Agents & Brokers of America.

“Consumers are absolutely correct. They are paying the price for unnecessary lawsuits in the form of higher insurance costs for their households,” said Charles Symington, Big I president & CEO. “The survey makes it clear: Americans want reform and accountability. Independent agents are working with their customers so they further understand the impact of lawsuit abuse and how to advocate for reform.”

Nearly three-quarters of respondents from the mobile survey targeting consumers aged 25 and over who have home, auto and/or business insurance, said attorneys and law firms benefit most from lawsuits.

Big I said it look as if many consumers remain unaware of the practice of third-party litigation funding. Roughly 40% said they were not familiar at all with TPLF.

Call for Action and Reform

• 7% say it’s important to reduce unnecessary lawsuits to help control insurance costs.
• 3% would support reforms if they knew certain legal practices were making their insurance more expensive.
• A majority (54.8%) believe that the state and federal government should take the lead in addressing the issue, while many also pointed to insurance companies (33.6%) and courts (32.6%).

“Consumers overwhelmingly agree that unchecked litigation is not protecting them, it’s costing them. It directly affects their family budgets by adding thousands of dollars every year in unnecessary costs for their insurance and other products and services,” added Symington.