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  • Writer's pictureRoland Abbott & DeZoort

Do You Live In Georgia? This Is Why Your Insurance Is So Expensive

If you’ve looked at your family budget recently, you’ve noticed that your insurance premiums continue to rise. From homeowners to auto to business, every conceivable form of insurance in every part of the country is more expensive than it was just a year ago. The situation is so bad that the Federal Reserve cited auto insurance as one of the primary drivers of inflation last month reporting an eye-popping year-to-date increase of more than 20%. 


States like Florida, New York, and California have seen the most egregious price hikes after natural disasters and state insurance boards forced insurance providers to raise prices to remain profitable. Multiple states saw several insurance companies abandon the state entirely leaving fewer options and higher prices for residents. 


Despite these ancillary drivers of higher insurance premiums, the primary culprit continues to be frivolous lawsuits that twist state laws and rely on uninformed juries to award premium payouts. For example, here in Georgia, a jury awarded a jaw-dropping $1.7 billion fine in punitive damages against Ford for supposedly faulty roofs in their Super Duty trucks. The punchline of the story was that Ford was unable by law to point out to the jury that the plaintiffs were not wearing a seat belt because of a quirk in state law known as the seatbelt gag rule. This obscure gag rule costs insurance companies a significant amount of money and distorts the facts when juries hear auto-related litigation. 


A parallel example are the phantom medical damages that courts routinely award plaintiffs for auto accidents in Georgia. Instead of basing the damages on the amount someone actually paid for the healthcare they received, courts calculate the amount based on the top-line number they are billed. This is the sticker price that literally no one actually pays. This forces the insurance company to pay higher prices which is passed back down to the consumer. 


If you’re a business owner you should be deeply concerned about a Georgia Supreme Court ruling that drastically expanded the state's premises liability clause. The court sided with a lower court which issued a $45 million verdict against CVS for a shooting that did not include anyone affiliated with the company but occurred in a store parking lot. The ruling assigned 95% liability to CVS, 5% to the plaintiff, and zero liability to the shooter. 


All of these examples underscore the need for tort reform specifically in the state of Georgia. The situation is so bad that trial lawyers have flocked to the state spending more than $84 million in television ads alone last year. While we don't have the official numbers, we believe trial lawyers spent more than twice that amount on digital ads meaning nearly a quarter of a billion dollars was spent last year in Georgia to solicit these lawsuits. Thankfully, Governor Brian Kemp has recognized the issues and recently said, “I look forward to introducing legislation this year that will reflect my priorities to stabilize the market for insurers, stabilize premiums for Georgia’s families, and level the playing field in our courtrooms so we can continue to create even more quality, good-paying jobs.” 


Insurance is supposed to be the security blanket that lets us sleep soundly at night. Unfortunately, bad actors, sleazy trial lawyers, and archaic state laws have allowed some people to abuse the system while the rest of us pay the price. Our hope is that common sense reforms will be implemented this legislative session and that quality, affordable insurance will be available for everyone. 


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