Study: Lawsuits Fueling Missouri’s Rising Insurance Costs
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Full story in MissouriNet
A study finds rising insurance premiums are costing the state of Missouri hundreds of millions of dollars in lost revenue. The Missouri Department of Commerce and Insurance study also finds the cost of large insurance settlement and courtroom awards cost Missouri residents over $1,200 between the years 2017 and 2022.
DCI Director Angela Nelson says the report finds “social inflation” (insurance claim rises above and beyond those caused by economic factors) has outpaced economic inflation.
“Missouri families are already feeling the impact of rising insurance costs, and lawsuit abuse is only worsening the problem,” DCI Director Angela Nelson said. “When litigation tactics push awards far beyond reasonable damages, those costs don’t just disappear – they show up in higher premiums for consumers and businesses across the state.”
Analysts (Swiss Re data) gathered date from 2017 to 2022 and noted “social inflation” rose by 5.4% annually, compared to 3.7% for economic inflation. The Perryman Group estimates excessive litigation resulted in a “tort tax” of $1,216 per Missourian, contributing to $7.6 bill in lost economic output and $384 million in lost state revenue each year.
The study concluded the pressures have had led to the following consequences:
“If these trends continue, Missourians and businesses will continue to see higher premiums, have fewer insurance options, and suffer broader economic consequences,” Director Nelson said. “Without meaningful reforms, the impact of lawsuit abuse will continue to grow, and all Missourians will ultimately pay the price through higher insurance premiums.”
Read the full story at missourinet.com.