Broker Check

Insurance Litigation Continues to Rise

September 16, 2022
Share |

A post by attorneys Julius Matusewicz and Burt L. Freeman on the PropertyCasualty360 website (propertycasualty360.com/2022/09/13/emerging-factors-forecast-a-contnued-rise-in-insurance-litigation/) describes the factors fueling increased litigation of insurance claims.

The COVID-19 pandemic's effects on claims included crammed court dockets, trial delays and more cases referred to mediation. The legal industry adapted by using "remote litigation" which allowed higher volume because travel was eliminated. 

While less than 1% of cases go to trial, the rate is increasing, rising by 47% from 2017 to 2021. Much of the increase was due to COVID-19 business interruption claims  (some victories for insureds at trial, but most appeals favor insurers).

Florida accounts for 76% of homeowners property and casualty lawsuits nationwide despite only filing 8% of homeowners claims. Attempts to remedy the situation by legislation have resulted in more lawsuits, with insurers leaving the market voluntarily or through insolvency.

A new area for insurance litigation is cybersecurity and cryptocurrency, when policies are silent or wording is unclear. Cyber insurance claims have increased by 100% in the last three years. 

Insurers will be treating claims with the expectation they will be tried to completion. This will lead to increased expenses resulting in higher premiums.