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Atlanta (AP) – The field of the Governor of Georgia Brian Kemp is simple: putting limits to prosecution Hautera increases insurance costs.
Reality, however, is more complicated.
Changes could reduce civil liability insurance costs for companies and owners of commercial properties. The evidence is mixed to find out if it would lead to a large reduction in bonuses for the car and other types of insurance. And some researchers say that efforts limiting prosecution, often called reform of the offense, expand the benefits of insurers more than what reduces the price of policies.
“The net impact is that it really improves the profitability of insurers,” said Tyler Leverty, a business professor who studies risks and insurance at the University of Wisconsin-Madison.
When Kemp unveils his proposals on Thursday, the Republican Governor is likely to continue to rely on his argument that everyone’s insurance rates increase because unjust prosecution is increasing and juries grant excessive damages.
The problem is Kemp’s absolute priority This year after promising the Chamber of Commerce of Georgia, he would do it act And rather pushed a law so that the Georgia for Insurance Commissioner John King collects data in 2024.
King said prosecution stimulate insurance companies to reduce the coverage of retail companies, apartments, drivers and others. He said that business owners in areas that insurers qualify high crime are among those who have the most difficulties. Companies that offer low -income housing have also complained.
“Go down to the south-east of Atlanta and talk to the small convenience owners to be close because they cannot find insurance,” said King.
Are unjust proceedings and the big jurys real real problems?
Some say that there is no evidence that a nationwide litigation crisis stimulates high insurance rates.
“I went in search of the data and I did not find it,” Kenneth Klein, a law professor at California Western School of Law, said. “This does not mean that it does not happen. This means that we cannot document it. »»
But Mike Iverson of Oakbridge Insurance and former President of the Independent Insurance Association Agents said that insurance companies and predictability when determining the rates and how to distribute the losses.
In a well -known case, a jury awarded a man nearly $ 43 million after a shooting in a CVS parking lot in Atlanta, arguing that the company should have strengthened security. In another case, a park of mobile houses from Jonesboro was ordered to pay $ 31 million to the daughter of a man who was shot there.
Opponents note that few verdicts are that large insurance companies are always profitable. They want legislators to require more transparency on how they set rates.
“Whenever they want an excuse to increase rates or limit the coverage, they will always indicate a verdict here and there and will make all kinds of claims on how it affects their results,” said Joanne Doroshow, executive director of Center for Justice & Democracy at the New York Law School.
The study of the impact of the reform of the offense on bonuses in other states is difficult because other factors are at stake and there are different reform combinations. Some have seen advantages, but research varies.
What leads rates?
Other factors that influence insurance rates include inflation, extreme weather conditions and labor costs and materials. It is normal for the insurance markets to go through difficult years where less coverage is offered as rates increase.
In many coverage, including those which are not strongly affected by prosecution, insurers in 2022 were less profitable in Georgia than in several other states, according to data from the National Association of Insurance Commissioners. A spokesperson said over a longer period, however, nothing is abnormal in the fluctuations of Georgia.
King’s report, mainly using car insurance data, indicates that the number of complaints and the size of resulting payments have increased over the years, in particular those involving prosecution. Some figures dropped in 2022 and 2023, but he said it was because the data is incomplete.
King also found that a higher percentage of legal complaints leads to payments that have reached the maximum amount in dollars that a policy covers.
The Georgia Trial Lawyers Association, which puts pressure against the tort reform, challenges King’s conclusions.
Consultant at risk, David Stegall, said that the number of complaints was in accordance with the high number of car accidents in Georgia. Complaints and payments have been stable or down, especially when adjusted for population growth and inflation, he said.
He also found that if residents of Georgia pay between 11% and 68% more for car insurance than residents of other states, they are more than 200% more likely to be in an accident.
Adam Willis, president of the F&W Camintenage company F&W, said that his business bonuses have doubled in the past 10 years while fewer insurers offer full coverage. His business has also been prosecuted more often, he said.
Defenders of the current system say that compromises of trial limits are a bad deal.
“The governor says that limiting your law as a consumer will reduce your insurance costs, but that it is not only a bad idea for everyday citizens, it is simply not correct,” said The representative of the state Tanya Miller, Democrat of Atlanta.
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Kramon is a member of the body for the Associated Press / Report for America Statehouse News Initiative. Report for America is a non-profit national services program that places journalists from local editorial rooms to report on under-cover issues. Follow Kramon on X: @charlottekramon.
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