Consumers Agree Legal System Abuse Drives Up Insurance Costs, Prompting Demand for Reform

• By: AnneMarie McPherson Spears
• November 19, 2025

As insurance lawsuits hit record levels, a new survey of consumers from the Big “I” reveals growing concern that excessive and abusive litigation is driving up costs for consumers and reforms are needed.

According to the survey, 64.3% of respondents said they were concerned about how excessive lawsuits increase their premiums, and 80.5% believe that the legal system is used in ways that unfairly drive up insurance costs. Overwhelmingly, 8 in 10 (80.3%) respondents also believed that their premiums would increase due to excessive lawsuits, even if they had never filed a claim themselves.

“Consumers are absolutely correct. They are paying the price for unnecessary lawsuits in the form of higher insurance costs for their households,” said Charles Symington, Big “I” president & CEO. “The survey makes it clear: Americans want reform and accountability. Independent agents are working with their customers so they further understand the impact of lawsuit abuse and how to advocate for reform.”

Consumers also expressed skepticism about who truly benefits from lawsuits against insurers. Nearly three-quarters (73%) said attorneys and law firms profit most, compared to only 30.9% who believe consumers with valid claims benefit.

Third-Party Litigation Funding Drives Costs Even Higher

Despite awareness of traditional lawsuit abuse, many consumers remain unfamiliar with “third-party litigation funding,” a growing practice where outside investors finance lawsuits for profit. Nearly 40% said they were not at all familiar with this trend, underscoring a gap in public understanding of how global capital is increasingly driving U.S. insurance litigation and consumer costs.

Call for Action and Reform

Consumers aren’t just aware of the problem; they’re ready for change. The survey reveals overwhelming demand for action to rein in abusive litigation and restore fairness to the insurance system.

Among consumers, 89.7% say it’s important to reduce unnecessary lawsuits to help control insurance costs and 84.3% would support reforms if they knew certain legal practices were making their insurance more expensive.

A majority (54.8%) believe that the state and federal government should take the lead in addressing the issue, while many also pointed to insurance companies (33.6%) and courts (32.6%).

“Consumers overwhelmingly agree that unchecked litigation is not protecting them, it’s costing them. It directly affects their family budgets by adding thousands of dollars every year in unnecessary costs for their insurance and other products and services,” Symington added.

According to The Perryman Group, lawsuit abuse is costing the average American family $5,135 a year. Another recent study from the Insurance Information Institute (Triple-I) and Munich Reinsurance America Inc. (Munich Re) estimates the impact is even higher—at more than $6,500 for a family of four.

The Big “I” is working with a broad coalition of stakeholders across a variety of industries to educate consumers and legislators about litigation funding and hold those accountable for driving up insurance costs.

The national survey was directed by Trusted Choice® and conducted by MFour Data Research. Trusted Choice offers a host of digital resources for agents to use with their clients when discussing excessive litigation and its impact on premiums. These include a comprehensive toolkit, videos, social media graphics, a legal system Q&A and more that provide critical information about how lawsuit abuse is affecting consumers’ bottom line.

AnneMarie McPherson Spears is IA news editor.

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