Lawsuits & Claims — Pumping Up Commercial Auto Rates

AM Best found between 2014 and 2024 commercial auto loss payments rose 6.4% per year. That more than doubles the 2.8% average inflation rate. Best said the gap is due to a more litigious environment and more claimants using third-party funding for their lawsuit.

And then — Best senior analyst, Christopher Graham said — there are rising jury awards. “Legal system abuse comes in several forms and can have a severe impact on insurers’ results, particularly in liability lines of coverage,” he said.

AM Best’s report said through 2018 commercial auto claims rose higher than the usual $1 million limit and edged into the umbrella layers. Average losses for commercial auto claims has more than doubled in the last nine years and has grown about 8% annually.

Source link: Insurance Business America — https://bit.ly/3UsG6TH