MALVERN, PA — A new joint study from the Insurance Information Institute (Triple-I) and the Casualty Actuarial Society (CAS) finds that escalating legal system abuse and litigation costs have added between $231.6 billion and $281.2 billion in excess liability insurance losses over the past decade—an increase far beyond what can be explained by standard economic inflation.
The report, The Impact of Increasing Inflation on Liability Insurance: 2015–2024, attributes the spike largely to mounting jury awards, expanded litigation financing, and broader legal reforms that have raised claims costs across key insurance lines.
According to the analysis, personal auto liability saw additional losses between $91.6 billion and $102.3 billion, while commercial auto liability climbed by $52.0 billion to $70.8 billion. Other liability occurrence lines contributed an added $83.4 billion to $103.3 billion, and product liability occurrence increased by up to $4.8 billion.
“Legal system abuse, manifested through excessive verdicts and litigation behaviors, has fueled a structural rise in claim costs that continues to increase costs for insurers and policyholders alike,” said Sean Kevelighan, CEO of Triple-I.
The study highlights that claim severity—rather than claim frequency—is driving these higher losses. The number of claims has generally fallen, but the cost per claim has surged well above overall inflation levels. For instance, commercial auto claim severity has risen 93.5% since 2015, compared with just 3.2% annual growth in the Consumer Price Index during the same period.
James Lynch, FCAS, MAAA, co-author of the study, said the data show “insurance loss inflation has its own unique drivers,” pointing to litigation financing, higher jury verdicts, and shifting legal dynamics as major contributors.
The findings build on earlier Triple-I research identifying “social inflation”—the rise in claims costs tied to legal and societal factors—as a persistent problem for insurers. A related Triple-I report estimated that increased motor vehicle tort lawsuits extracted $42.8 billion in excess value between 2014 and 2023, supporting the conclusion that roughly one-third of rising auto liability losses stem from legal system abuse.
While overall consumer inflation peaked in 2022, the study concludes that insurance loss inflation remains structurally elevated due to the long-term effects of litigation trends, higher settlement values, and the compounding impact of legal system abuse.
“This isn’t just about prices rising in the economy—it’s about the cost of our legal system escalating beyond sustainable levels,” Kevelighan said. “Recognizing and addressing legal system abuse is essential to managing costs and protecting consumers.”
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