Follow the Money: Fewer and Fewer Lawsuits Yet Insurance Rates Go Higher and Higher

by Charles Miller

The insurance industry has been telling us for years that they have to raise our insurance rates because of “lawsuit abuse.” Well, in realty, the number of auto accident lawsuits has been declining for years. The number of medical malpractice lawsuits has been declining for years. In fact, the number of all sorts of personal injury lawsuits has been declining for years. Meanwhile, what’s been going on with insurance companies? Billions and billions in huge, fat, record profits.*

For example, in 2004, insurance profits were a record-setting $38.7 billion. Then, in 2007, insurance companies reported $61.9 billion in profits—almost double the figure from just a few years prior! The data from 2010 shows that insurance profits grew yet again. In fact, did you know that the health insurance industry has been setting new records for profits every year for the last several years?**

Meanwhile, what about personal injury lawsuits? This month’s Texas Bar Journal includes an analysis that compares the number of lawsuits pending in Texas courts in 2001 and in 2010. The total population of Texas grew by millions over those years. Despite millions more people living in and driving around Texas, there were fewer personal injury lawsuits in 2010 than there had been back in 2001.***

After more than a decade to study the actual results of so-called “tort reform,” we know now what the insurance lobby is really after. First, they want to limit the rights we have to make a claim if we are injured by someone else’s negligence. By limiting the rights of people who are injured, the insurance industry reduces how much it will ever have to pay out for claims. Second, they want to keep charging us more and more for insurance premiums–as if they had not just limited our rights to make a claim. Whenever you hear the insurance industry talking about “tort reform,” keep your hand on your wallet!

*See Debunking the Myths, American Association for Justice,

**See, e.g., Health Insurers Making Record Profits as Many Postpone Care, New York Times (May 13, 2011), available online at

*** Steve Fischer, Practicing Law in Texas Exploring Patterns of Growth and Employment, Texas Bar Journal (May 2012), available online at


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by Charles Miller

Charles Miller is a licensed attorney and a partner at Heygood, Orr & Pearson. Charles focuses his practice on areas of complex commercial litigation and personal injury litigation.