Report highlights Missouri lawsuit abuse and rising insurance costs

A recent report from the Missouri Department of Commerce and Insurance indicates that increasing lawsuit abuse is significantly contributing to rising insurance costs throughout the state. The report identifies “social inflation” – increases in claim severity beyond economic factors – as a key driver, outpacing economic inflation at a rate of 5.4% annually from 2017 to 2022. This litigation results in a substantial “tort tax” of $1,216 per Missourian, leading to $7.6 billion in lost economic output and $384 million in lost state revenue annually.

The report highlights practices like third-party litigation funding and strategies aimed at maximizing jury awards as contributing factors. These pressures are already impacting various sectors, with foster care providers facing difficulty obtaining coverage and homeowners experiencing premium increases of 8-12% annually. Medical malpractice rates are also rising, and auto liability insurance is producing substantial underwriting losses.

The report suggests that reforms implemented in Florida and Georgia could serve as models for Missouri, potentially stabilizing the insurance market and protecting consumers. Director Angela Nelson emphasizes the need for strategic reforms to promote fairness and transparency in the legal system to prevent further increases in premiums and ensure a healthy Missouri economy.

(Source：Newstalk Kzrg)