Insurance Thought Leadership announced that legal system abuse in Colorado, fueled by aggressive trial lawyers and billboard advertising, has contributed to rising insurance premiums for residents.
The organization said the trend is impacting consumers across the state, with litigation practices leading to higher costs for policyholders. The announcement highlights concerns about how legal actions and advertising by certain law firms are affecting insurance rates.
“The Insurance Information Institute, in collaboration with the Casualty Actuarial Society, reported that legal system abuse and litigation trends added between $231.6 billion and $281.2 billion to liability insurance losses from 2013 to 2023. Practices such as third-party litigation funding pressure insurers to settle claims regardless of merit, driving higher premiums and affecting consumers nationwide,” according to Insurance Thought Leadership.
Colorado currently ranks as the 11th most expensive state for auto insurance, with premiums rising in part due to increased litigation. Firms including Franklin D. Azar & Associates, Anderson Hemmat, Bachus & Schanker, and McDivitt Law Firm—known for heavy billboard advertising—contribute to a high volume of personal injury claims. Analysts note that removing damage caps could raise physician insurance rates by 17% to 38%, costs ultimately passed to policyholders according to Ramos Law.
Nationally, legal system abuse has added $231.6 billion to $281.2 billion in liability insurance losses over the past decade, with personal auto liability increasing by $91.6 billion to $102.3 billion. The Casualty Actuarial Society and Insurance Information Institute found these costs exceed inflation, resulting in higher premiums for families even without claims. Small businesses face $160 billion in annual tort-related expenses due to similar trends according to the Casualty Actuarial Society.
Insurance Thought Leadership describes itself as a global network of thought leaders and decision makers transforming the insurance and risk management marketplace through knowledge sharing, big ideas, innovative technology, and real-life applications according to the organization.
