Georgia Governor Requests $175 Million for Rising Liability Costs
Georgia’s Governor Brian Kemp has made a significant request to state lawmakers, seeking $175 million to address the escalating costs of liability claims against state agencies and employees. This request comes as the state’s liability insurance fund has diminished significantly, now covering only a fraction of the outstanding claims.
The Surge in Liability Claims
As reported by the Atlanta Journal-Constitution, Georgia employs a combination of self-insurance and commercial insurance carriers to manage liability claims for approximately 325 state agencies and around 130,000 employees. Over the past decade, liability claims have skyrocketed by more than 300%, and projections suggest that this trend will continue to escalate in the coming years. These claims encompass a wide range of issues, from vehicular damages on state roads to tragic incidents involving children in foster care and serious injuries to inmates in state prisons.
Proposed Safety and Security Enhancements
In addition to the funding request, Governor Kemp has proposed a substantial investment of $600 million aimed at enhancing safety and security within Georgia’s prison system. This initiative seeks to address the growing concerns surrounding inmate safety and the overall conditions within state facilities.
Advocating for Tort Reform
The governor’s funding request is part of a broader strategy to tackle the rising costs associated with liability claims. Alongside property-casualty insurance groups, Kemp is advocating for significant tort reform legislation in Georgia. The Insurance Information Institute (Triple-I) has recently launched an advertising campaign in the Atlanta area, highlighting the impact of legal system abuse on rising costs for Georgia residents. According to Triple-I, excessive lawsuits are estimated to add an additional $1,415 per year to the average household’s expenses in Georgia.
Insurance Industry Perspectives
The American Property Casualty Insurance Association (APCIA) has voiced strong support for the proposed tort reform measures. Ron Jackson, vice president of state government relations for APCIA, emphasized the need to correct misconceptions regarding the profitability of the insurance industry in Georgia. He stated, "Insurers in Georgia are losing money," particularly in personal auto insurance and various lines of liability coverage, which are crucial for numerous businesses, including trucking, healthcare, and retail.
Jackson also pointed to Florida’s recent tort reforms and insurance claims litigation reforms, which have contributed to stabilizing that state’s litigation environment and property insurance market. "The proof is in the pudding," he remarked, suggesting that similar reforms could yield positive results for Georgia.
Key Components of the Tort Reform Package
Governor Kemp and legislative leaders recently unveiled a comprehensive tort reform package that includes several critical components:
- Elimination of double recovery of attorney fees
- Enhanced transparency for third-party litigation funding
- A new standard for premises liability
- Limitations on medical damages, restricting them to actual medical expenses
- Restrictions on what juries can consider regarding a victim’s pain and suffering
- Allowing parties in lawsuits to establish liability prior to considering damages
- Introduction of evidence regarding seatbelt use in auto accidents
These proposed changes aim to create a more balanced and fair legal environment, ultimately benefiting both the insurance industry and Georgia residents.
Legislative Session Timeline
The Georgia legislative session commenced on January 13, 2025, and is set to run through early April. Lawmakers will deliberate on Governor Kemp’s funding request and the proposed tort reform measures during this critical period.
Final Thoughts
As Georgia grapples with the challenges posed by soaring liability claims, the governor’s request for $175 million and the push for tort reform represent significant steps toward addressing these issues. By enhancing safety measures and reforming the legal landscape, Georgia aims to stabilize its insurance market and reduce the financial burden on its residents. For more information on the governor’s initiatives, you can view the official press announcement here.
In summary, the situation in Georgia highlights the urgent need for policy changes to manage liability costs effectively and ensure the sustainability of the state’s insurance framework.