The cost of lawsuit abuse is felt in the higher costs families across the country face. Now a new report in Alabama spotlights how “rising lawsuits” are having a serious impact on affordability in the state. The Alabama Department of Insurance has found that from 2020 to 2024, “the average cost of a liability claim increased 59%, far outpacing general inflation.” 

According to Lars Powell, executive director of The University of Alabama’s Center for Risk and Insurance Research, the surge of lawsuits in Alabama has had a serious impact for working families across the state. Powell’s analysis shows that lawsuit abuse in Alabama costs the average family around $880 a year:

Lars Powell, executive director of The University of Alabama’s Center for Risk and Insurance Research said, “The Alabama Liability Insurance Data Call report demonstrates that liability costs in Alabama are substantial (about $880 per household in 2024) and increasing faster than inflation. The patterns observed in the data are consistent with an association between higher levels of litigation and increased claim severity across multiple lines of insurance. It is important for Alabama policymakers to have this information as they consider potential approaches to address rising insurance costs.”

As neighboring states like Georgia and Florida have passed lawsuit abuse reforms that have already demonstrated an ability to bring down costs, Alabama is at risk of getting left behind. Without action, Alabama families will continue to pay the price for a legal system that rewards excessive litigation at the expense of affordability. The data in this new report is clear: rising lawsuit abuse is driving up costs faster than inflation and having a negative impact on household budgets across the Yellowhammer state. Alabama lawmakers face a choice. They can either pass lawsuit abuse reform and follow proven solutions that help consumers, or they can allow lawsuit abuse to keep pushing everyday expenses higher for working families.