Floridians for Lawsuit Reform announced on X that experts on CNBC’s Money Movers segment warned of the impact of excessive litigation and third-party financing on insurance premiums for consumers and businesses.
According to Floridians for Lawsuit Reform’s summary of the segment, experts described legal system abuse as a growing national threat to insurance affordability. The segment specifically noted that aggressive tactics by billboard attorneys and a surge in opportunistic lawsuits are fueling cost increases. As litigation becomes more frequent and severe, insurers are compelled to pass those costs on to policyholders, raising rates for households and small businesses across the country.
Experts featured on CNBC’s broadcast identified third-party litigation financing as a key accelerant of excessive legal action. According to the U.S. Chamber of Commerce’s Institute for Legal Reform, the litigation funding industry in the U.S. has ballooned to over $17 billion by 2022, enabling more lawsuits and increasing the potential for outsized settlements. This influx of outside capital was cited by both CNBC and legal analysts as a major factor driving up insurance company legal costs, which are ultimately paid by consumers.
The Insurance Information Institute (Triple-I) has documented that litigation costs now consume a growing share of every premium dollar collected by insurance companies. According to Triple-I’s 2024 market outlook, legal system abuse is leading to disproportionate premium increases, especially in auto, property, and commercial lines. The report concludes that the persistence of high litigation expenses has become a central factor in the affordability crisis affecting consumers and businesses nationwide.
According to its official website, Floridians for Lawsuit Reform is a nonprofit advocacy group dedicated to advancing legal reforms that reduce lawsuit abuse and support a fair, affordable insurance market in Florida. The organization regularly informs lawmakers and the public about the economic impact of excessive litigation through research, public education campaigns, and coalition building. Its said mission is to promote balanced policy solutions that benefit consumers, businesses, and the state’s insurance market as a whole.
