How Attorney Ads May Drive Up Auto Insurance Rates, Per New Survey (Insurance Information Institute)

How Attorney Ads May Drive Up Auto Insurance Rates, Per New Survey

Wednesday, October 30th, 2024 Auto Insurance Industry Legislation & Regulation Litigation

A new Insurance Research Council (IRC) survey highlights a perceived link between attorney advertising and rising auto insurance costs in the U.S. Conducted nationwide, the study finds that 60% of respondents associate attorney ads with an increase in the number of claims filed, while 52% believe the ads contribute to higher auto insurance premiums. Respondents also noted that attorney ads, especially on billboards and TV, have become more prevalent over the last few years, with 89% seeing such ads and nearly half observing an increase in advertising volume.

The survey additionally explored consumer awareness of litigation financing, where third-party companies fund lawsuits in exchange for a portion of settlements. Although most respondents remained neutral, 69% favored transparency regarding outside funding in lawsuits. Further findings revealed a high correlation between attorney consultation and ad exposure, with 74% of those who had seen attorney ads reporting that they later sought legal help.

The report suggests that increased advertising from large law firms and third-party litigation funders could contribute to the high volume of mass tort and personal injury cases, which some believe drives up insurance costs and lengthens claim resolution times. Rising litigation in states like Georgia, Louisiana, and Florida has brought concerns about affordability and insurance availability to the forefront, particularly as large settlements and extended legal battles threaten to strain the insurance system.


External References & Further Reading
https://www.insurance-research.org/research-publications/public-opinions-attorney-involvement-insurance-claims
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