A report released by Insurify on August 11 projected that car insurance rates in California, Missouri, and Minnesota will increase by more than 50% in 2024.
According to the report, Californians are paying more than the national average for full coverage car insurance, with drivers spending an average of $2,417 as of June this year. Insurify projected that car insurance costs will rise by 54% total in California in 2024, meaning drivers will be paying an average of $2,681 by the end of the year. Nationwide, car insurance costs increased by 28% between June 2023 and June 2024, but in California, they increased by 45% during that time period.
A report from the U.S. Chamber of Commerce Institute for Legal Reform found that a rising number of nuclear verdicts, or verdicts larger than $10 million, is contributing to increasing insurance costs. These large verdicts are referred to as "nuclear" due to the "devastating" effect they can have on "businesses, entire industries, and society at large," according to the report. Nuclear verdicts can "undermine fundamental fairness and predictability in the rule of law" while also making goods and services more expensive. They also make insurance more expensive and, in some cases, make insurance coverage harder to find.
In a May report released by the public relations firm Marathon Strategies, California ranked third in the country for the largest total sum of nuclear verdicts in 2023. The state saw 117 nuclear verdicts last year which totaled $25.23 billion. Marathon cited California’s "liability-friendly laws and courts" as one reason the state has seen so many nuclear verdicts. One major nuclear verdict in the state in 2023 stemmed from a lawsuit over a vehicle accident, which resulted in a $161 million verdict against Suzuki Motor in Orange County.
Morning Consult conducted a statewide survey of Californians in February which found that 62% of respondents believe the cost of car insurance is negatively affecting California's economy. Additionally, 66% agreed that "California’s insurance markets are in crisis," according to the poll. Seventy-nine percent of respondents said it is "concerning" that the state's required liability limits enable personal injury attorneys to "more easily pursue settlements." Respondents (69%) also said they support policy reforms that lower insurance costs for all by "limiting personal injury lawyers’ ability to abuse the legal system."
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