MALVERN, PA — Rising motor vehicle litigation added an estimated $43.84 billion to U.S. auto liability insurance costs from 2015 through 2024, accounting for roughly one-quarter to nearly one-third of the industry’s additional inflationary costs during the period, according to new research from the Insurance Information Institute and the Casualty Actuarial Society.
The analysis found that motor vehicle lawsuits increased substantially faster than overall federal civil litigation, while average plaintiff awards climbed, adding financial pressure to insurers and potentially contributing to higher premiums for drivers.
The estimated $43.84 billion in additional litigation costs represented 25.3% to 30.5% of the $143.6 billion to $173.1 billion in increased auto liability costs attributed to inflation in earlier research by the two organizations.
Federal motor vehicle tort filings reached 6,809 in 2024, their highest annual level since the study’s historical series began in 1995.
After declining at an annualized rate of 2.8% between 1995 and 2008 and remaining relatively stable through 2014, federal motor vehicle tort filings increased at a compound annual rate of 5% from 2014 through 2024.
The divergence was particularly pronounced when adjusted for economic activity.
From 2015 through 2024, overall federal civil case filing frequency declined at an annualized rate of 0.9%, while motor vehicle tort filing frequency increased 4.5% annually.
The increase occurred across different state insurance systems. Federal motor vehicle tort filings grew at an annualized rate of 4.6% in no-fault states and 6.2% in tort states during the same period.
The research also identified differences in how motor vehicle lawsuits are resolved compared with other federal civil cases.
Approximately 52.4% of motor vehicle tort cases disposed of between 2015 and 2024 ended in settlements, compared with 24.2% of civil cases overall.
Only 7.1% of motor vehicle tort cases resulted in judgment dispositions, compared with 27.4% of all federal civil cases.
Average awards in federal motor vehicle tort judgments favoring plaintiffs increased from $377,000 during 1995-2004 to $681,000 during 2015-2024.
The Insurance Information Institute, known as Triple-I, attributed part of the increase in auto liability costs to litigation activity growing faster than underlying insurance claim frequency.
“The data show a growing disconnect between motor vehicle tort litigation and underlying claims frequency,” said Sean Kevelighan, Triple-I’s chief executive officer.
The study estimated approximately $1.07 billion in excess litigation value in federal motor vehicle tort cases between 2015 and 2024.
State courts accounted for most of the estimated additional costs, with researchers calculating $42.77 billion in excess litigation value using two methodologies to account for incomplete state-level information.
Comprehensive motor vehicle tort filing and disposition data were publicly available in 11 states as of 2024, representing approximately 50.6% of the U.S. population.
Researchers used the available records to estimate litigation activity in states without complete reporting systems, then combined the results to calculate the national state-court figure.
The report cautioned that differences in how states collect and classify civil litigation data create uncertainty around those estimates.
Morgan Bugbee, vice president of research and practice advancement at the Casualty Actuarial Society, said rising insurance losses cannot necessarily be explained by claim frequency alone.
“Changes in litigation activity, amounts demanded or awarded, and claim severity also contribute to insurance losses,” Bugbee said.
The organizations called for more consistent state court reporting on lawsuit filings, settlements, judgments and awards to improve estimates of litigation-related insurance costs.
The findings appear in Motor Vehicle Tort Litigation Continues to Outpace Claims Frequency, a joint analysis examining federal and state court trends and their relationship to auto liability insurance expenses.
Support the local news that supports Chester County. MyChesCo delivers reliable, fact-based reporting and essential community resources—free for everyone. If you value that, click here to become a patron today.