Georgia’s governor is holding a series of roundtable discussions to understand the impact insurance costs are having on the state’s businesses.
The first of the three scheduled sessions focused on the impact the state’s civil litigation climate, along with the cost and availability of coverage, has on the businesses.
Gov. Brian Kemp (R) said the ultimate goal of tort reform is to stabilize the costs for Georgia citizens and businesses, as well as ensuring multiple insurance companies are providing coverage in the state.
“Right now, everyone across the country, including our fellow Georgians, are struggling under record high prices. Insurance costs are a major component of that growing cost,” he said. “For example, a recent report by consumer financial services firm Bankrate ranked Georgia as the most expensive state in the country for the hidden cost of owning a vehicle with drivers of new vehicles paying an average of $8,249 per year.”
The report posted on the Bankrate website (www.bankrate.com/insurance/car/hidden-cost-car-ownership-study/#states-with-the-most-expensive-hidden-car-ownership-costs) broke down some of the factors driving the cost.
“Georgia is in the top group for higher average vehicle tax and averages $213 monthly for full coverage car insurance. Despite fairly low per-gallon gas prices, drivers’ average annual mileage of 17,508, plus high annual car maintenance and repair costs ($1,649), pushed Georgia to the front of the class,” found Bankrate.
Kemp had told the Georgia Chamber of Commerce in 2023 that addressing insurance costs would be one of his priorities in the 2024 Georgia Legislative Session. However, by the start of the session, he realized it would not be a one-year campaign.
To begin the process, the legislature enacted House Bill 1114, the Data Analysis for Tort Reform Act. It tasks Insurance Commissioner John King with collecting data on the impact legal actions have on insurance premiums.
“We are going to insurance companies and asking for their litigation costs, and we’re asking for three buckets,” King explained. “The first bucket is, what are the results of claims where there was no attorney involved, where a claim was made and the insurance company paid directly? What does that cost? The other one was, what is the cost when there’s a lawyer involved, but there’s no lawsuit involved? What is the cost of that? And then, the third one is when litigation is involved. That’s what this body here needs, some hard facts so they can make decisions.”
The report is to be ready and submitted to the governor by November 1.
“This is not an easy problem to tackle, but it’s one where we should and will work together to address my team, and I look forward to making a policy proposal during the coming legislative session,” said Kemp. “As we await the data from House Bill 1114, we are focused on these listening sessions, and we’re focused on making sure that we’re giving people an opportunity to let us hear their concerns and ensure that input from them will help us inform what we ultimately propose.”
One of the people attending the first session is a man on the frontlines of how insurance costs impact Georgia businesses and citizens.
John Sambdman is CEO of Samson Tours, Inc. He told the panel, which included Lt. Gov. Burt Jones, House Speaker Jon Burns, and Commissioner King, he is currently searching for a company to provide coverage.
“September 27 coverage runs out. I have zero quotes so far. I do hope to have at least two,” he said. “It’s gotten to the point where it’s almost untenable in the state of Georgia to find coverage for my kind of business, which is transportation. Back in the day, there were probably 15 different companies we could choose from to get quotes. Now, there’s four, maybe five. National Indemnity, who I’m with now, is leaving the transportation market because they can’t make money.”
Sambdman also said he hopes his premiums will not go up too much. He said his rate went up 400% from 2020 to present.
Kemp reminded attendees that Georgia has been ranked number one for doing business for ten years in a row. He said if the state wants to maintain that record, tort reform must be addressed.
The governor’s office told ABD the dates and locations for the next two roundtable sessions have not been set.
Local business leaders are preparing for the next legislative session. The Columbia County Chamber of Commerce said its annual pre-legislative breakfast will be held on November 14. Keynote speaker will be Sonny Purdue, Chancellor of the University System of Georgia.
