Auto insurance in Georgia has become increasingly expensive, with recent reports highlighting a notable rise in costs and litigation.
A study by the Insurance Research Council (IRC) shows that in 2022, Georgians spent 2.0 percent of their median household income on auto insurance, compared to a national average of 1.5 percent. This ranks Georgia 47th in affordability among all states, with only three states faring worse.
A key factor behind this trend is the increase in litigation related to auto insurance claims. According to an August IRC report, Georgia's litigation rate is now more than double that of the median state, leading to higher injury claim rates and increased legal expenses. This trend is partly attributed to tort reform in neighboring states, prompting legal firms to pursue opportunities in Georgia.
The American Tort Reform Association (ATRA) reported that over $160 million was spent on local legal service advertisements in Georgia in 2023—a nearly 40 percent increase since 2019. As a result, ATRA has ranked Georgia as the top "Judicial Hellhole" for 2023 and 2024, citing high litigation levels and a challenging legal environment for businesses and insurers.
Accident-related injury claims in Georgia occur 60 percent more frequently than the national average, and the state also has above-average rates of uninsured and underinsured motorists. Between 2014 and 2022, insurance costs in Georgia increased at an annualized rate of 5.6 percent, surpassing the national average and contributing to a potential long-term affordability issue for personal auto insurance.
In response, Governor Brian P. Kemp convened a roundtable discussion at the Waffle House headquarters in Atlanta, focusing on civil litigation and its impact on the state's economy. The event included leaders from 12 Georgia businesses and policymakers, as part of a series of roundtable discussions planned for the fall.
“Maintaining our status as the No. 1 state for business for 11 consecutive years requires us to address the issues that hinder economic growth,” said Governor Kemp. “Our current litigation climate has led to increased costs for consumers and created higher barriers for those looking to create jobs in Georgia. These listening sessions have provided valuable insights that will inform our next steps.”
Earlier in 2024, the Data Analysis for Tort Reform Act was passed to collect data that will guide future legislative efforts. The General Assembly is expected to continue working on civil litigation reforms.
According to a report from the Insurance Information Institute, insurance abuse in Georgia costs residents $1,372 annually and results in over 137,000 job losses each year.