Article ID: 887c713c841085e4bccacacaa17f0de62587e8fb8e2467decb10e9802fe1806e
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URL: https://www.businessinsurance.com/lawsuit-abuse-is-the-new-personal-tax/
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Lawsuit abuse is the new personal tax - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Lawsuit abuse is the new personal tax Off Beat May 5, 2026 So-called “lawsuit abuse” has effectively become a hidden tax on American households, driving up the cost of insurance and everyday services while straining the broader economy, according to a report released Monday by Americans for Tax Reform. Excessive litigation and massive jury awards — often referred to as “nuclear verdicts” — are no longer just a concern for large corporations and insurers, the organization says. Instead, the financial impact is increasingly being felt by consumers through higher auto insurance premiums and rising prices for services such as rideshare trips, food delivery and home repairs. The report estimates that lawsuit abuse now costs the average U.S. household more than $6,600 per year in hidden litigation-related expenses. One of the clearest examples is personal auto insurance, where premiums surged more than 50% between 2021 and 2024. Insurers, facing significantly higher claims costs and larger jury awards, are adjusting pricing to reflect increased legal risk. As a result, policyholders are absorbing the costs through higher premiums. The rise in aggressive tort litigation is being fueled in part by expanded legal advertising and larger settlement demands. Trial lawyer advertising reached $2.5 billion in 2024, up 32% since 2020, while average lawsuit awards climbed sharply from $64 million to $214 million between 2015 and 2019. Critics argue that this environment encourages inflated claims and jackpot-style litigation, further destabilizing liability markets. For the insurance industry, the implications are significant. Rising litigation costs increase underwriting pressure, challenge affordability, and reduce market stability. As insurers continue to price for risk, the report warns that without tort reform measures to curb excessive litigation, consumers will continue paying the price — not only through insurance premiums, but across the broader economy. 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