By Lewis Nibbelin, Research Writer, Triple-I
Personal auto insurance premiums represent multiple aspects of the affordability crisis U.S. consumers face today, and a panel discussion at the Brookings Center on Regulation and Markets this week helped define and clarify them.
Panel moderator Aaron Klein, Miriam K. Carliner Chair and senior fellow in Economic Studies at the Brookings Institution, began the discussion by acknowledging “the rising rates of car insurance are part of the broader set of topics that have been given the term ‘affordability.’”
Representing insurers, regulators, and consumers, the panelists included Sean Kevelighan, CEO of Triple-I; Justin Zimmerman, a former commissioner in New Jersey’s Department of Banking and Insurance; and Chuck Bell, programs director for advocacy at Consumer Reports.
All agreed that much of the blame for rising rates can be attributed to external factors such as the costs associated with safer, more technologically sophisticated vehicles, thereby raising the costs to repair and replace them. Inflation has exacerbated these impacts, with auto replacement costs up 28 percent from 2021 to 2025. Over the past 12 months, inflation increased 4.2 percent, thanks in large part to geopolitical risks, supply-chain disruptions, and rising oil prices.
Disagreement surfaced, however, around the degree of insurance-industry responsibility for insurance costs. Consumer Reports’ Chuck Bell suggested the $14 billion insurers issued in rebates to consumers during the COVID-19 pandemic was insufficient, prompting Kevelighan to point out that, “of all the refunds being given, you saw the most coming out of the insurance business and community.” Zimmerman noted that many states also froze insurers’ ability to raise rates during the pandemic, leading to some post-pandemic “rate catch-up.”
Rampant legal system abuse helps fuel the strain. While derided as a concept by some, Kevelighan cited analysis from Triple-I and the Casualty Actuarial Society that indicates excessive litigation added up to $281.2 billion in increased liability insurance losses from 2015 to 2024 – a finding that economic inflation alone cannot explain. A separate Triple-I report on civil case filings indicated roughly one-third of increasing inflation in auto liability losses stemmed from these legal trends.
Kevelighan also highlighted the $380 million spent by third-party litigation funders (TPLF) on online advertising last year, according to a study from the National Insurance Crime Bureau and 4WARN. Now “a global multi-billion-dollar asset class,” TPLF has become a target for reform in a growing number of states, notably New York.
New York affordability struggles
Wiping out billions of dollars in U.S. economic activity annually, legal system abuse costs New York residents 427,794 jobs and $7,027 per household per year, contributing to the fourth-highest auto insurance expenditures in the nation, Triple-I estimates. Moreover, the state’s average personal auto injury claim is $46,726, at more than twice the national average.
Building on legislation to tackle TPLF, New York lawmakers recently passed a package of auto insurance reform bills to disincentivize legal system abuse and fraud, one of which will introduce a $100,000 cap on noneconomic damages for drivers who were at fault, uninsured, or impaired at the time of an accident. Comparative negligence rules were also updated to ensure costs cannot be shifted away from the motorists responsible for an accident.
Kaitlin Asrow, New York State’s acting superintendent for the Department of Financial Services, told Klein in an interview before the panel, “Over the last five years, suspicious fraud reports for just no-fault auto increased 80 percent.” She added that “staged accidents were up 34 percent” in New York City alone during the same period.
While further reforms are needed to address the Empire State’s high insurance costs, Kevelighan pointed out that similar efforts in Florida have begun to drive substantial premium reductions and renewed private market competition.
Modifying behavior for risk reduction
Though many influences on insurance costs are structural, Kevelighan emphasized “a lot of this comes down to our behaviors and how we’re driving and living.” As such, insurance must shift from “a once or twice a year type of transaction” to “an open and ongoing conversation” between insurers and their customers.
Part of that conversation revolves around distracted driving, which jumped significantly after the onset of the COVID-19 pandemic and remains at elevated levels. As measured by a recent Nationwide survey, seven in ten commercial drivers have reported experiencing increased distraction as well as reckless driving from other drivers, at a 10-point increase from 2025.
Nationwide also found that telematics commercial auto loss ratios drop by at least 30 percent when policyholders use telematics, a technology that monitors mileage, braking and acceleration, and other driving patterns to provide real-time feedback that can adjust unsafe behavior. In addition, built-in accident-avoidance systems are reducing rear-end collisions by 40 to 50 percent.
Noting telematics research is still in its early stages, Kevelighan said the “interaction and exchange” of risk information between insurers and policyholders “is where the industry is going to start shifting from just detecting and repairing after a catastrophe to predicting and preventing.”
“We’ve got to make sure we’re balancing out what it is that we’re doing to reduce our risk, because that’s the real driver,” Kevelighan explained. “When we reduce the risk, we can reduce the cost.”
Learn More:
N.Y. Natural Catastrophe Exposure Highlights Risk-Based Pricing Benefit
States Take the Lead on Third-Party Litigation Funding Reform
Oil Prices Might Reduce Accidents, But Severity Would Offset Impact
Florida Premiums Drop Amid Post-Reform Stability
New York Among Least Affordable States for Auto Insurance
Triple-I Testifies on New York Insurance Affordability
Revealing Hidden Cost to Consumers of Auto Litigation Inflation
