A new report from the American Property Casualty Insurance Association (APCIA) found that the cost of automobile litigation rises 15 to 20 times when an attorney is involved.
The report, “Trends in Attorney Representation: US Private Passenger Automobile Insurance,” looked at more than one million claims made over the course of a 10-year period. Conducted by Milliman, an actuarial firm, the report found that claims with attorney involvement increased significantly and took longer to resolve.
“APCIA is advocating for commonsense reforms that support regulations that address deceptive or misleading lawyer advertising and include transparency and disclosure in third party litigation funding,” Bob Passmore, APCIA’s department vice president of personal lines, said. “Consumers are led to believe through aggressive and sometimes misleading advertising that they need to call a lawyer rather than their insurer when they have an insurance claim. The ideas of ‘easy money’ is a temptation that’s hard to resist.”
The report found that private passenger automobile insurance claims that involved an attorney rose from 11.5 percent to 15.3 percent over the study’s term, and that in the last five years, the number of claims greater than $500,000 has doubled. The time it takes to resolve the claim has also increased, with two-thirds of claims without an attorney being resolved in 90 days, compared to less than 9 percent of claims involving an attorney being closed within 90 days. More than 20 percent of the cases involving an attorney were still open after two years, the report found.
APCIA said advertisements on television and billboards encouraging civil litigation may be a reason for the increase. Legal services ad totaled more than $2.5 billion for more than 26.9 million ads in 2024, the association said, up more than 32 percent compared to 2022.
“The reality is that consumers end up with a false promise of a huge payday for at least two reasons: they don’t know that their insurer will make them whole, and they don’t realize how much of this money goes to lawyers, their vendors and funders,” Passmore said.