One of the biggest selling points for tort reform is that it will lower insurance premiums. That’s the pitch insurance companies make to homeowners, drivers, businesses, the medical profession and others: make it harder for injured people to get compensation, and we’ll charge you less!
That’s the pitch we heard in South Carolina in 2025. The offer was light on details, though. Advocates of tort reform who spoke at Congressional hearings said premiums would go down. But they couldn’t say when. They wouldn’t say by how much. They wouldn’t even guarantee that it would happen.
There’s a good reason for that.
Case Studies in Tort Reform
Florida Auto Insurance Premiums
Recently, we’ve been hearing a lot about how auto insurance premiums are falling in Florida due to tort reform. Florida did see a major change in its personal injury laws…in early 2023. The revised statute:
- Cut the statute of limitations for filing a personal injury lawsuit in half
- Ended the state’s pure comparative fault model, significantly reducing the number of injured people entitled to compensation
- Limiting an injured person’s right to bring a claim against an insurance company that acted in bad faith
You’d think those big cuts in claims the insurance companies had to pay out would have reduced their expenses a lot. And, they did. In 2022, Florida auto liability insurers paid out an average of 80.5% of the premiums they collected in claims and adjustment costs. In 2023, car insurance premiums jumped by 31.7%. Consumers paid more, and insurers made bigger profits–in 2023, they kept 25.5% of the premiums they collected instead of 19.5%.
With costs dropping and profits increasing, the insurers decided to…raise rates again in 2024. This time the bump was smaller: an average of 4.3%. Still, again, consumers paid more. And in 2024, insurers kept 46.7% of the liability premiums they collected.
In other words, in 2024–the year after tort reform took effect–drivers were paying 37.36% more for their auto insurance. At the same time, insurance company profit margins were soaring.
In 2025, those rates finally went down, by an average of 6.5%. That sounds good in isolation, and the insurance industry made sure it got a lot of press. But here’s what it really meant for Florida drivers: in 2025, they paid an average of 28.66% more for auto insurance than they did the year before tort reform took effect.
Florida homeowners’ insurance premiums have increased every year since tort reform was enacted.
Louisiana Insurance Premiums
Before Louisiana passed its tort reform bill in 2020, Insurance Commissioner Jim Donlan suggested that the new law could mean a 25% reduction in auto insurance premiums.
The next year, when average car insurance premiums in the state jumped by 19%, he said it had been a guess and he hadn’t promised anything. That’s a pretty common story when tort reform lobbying includes guesses about lower premiums.
Rates increased in 2022, too, and again in 2023. Three years after tort reform, the average driver in Louisiana was paying 47.67% more for the same auto coverage. In 2025, rates finally declined–by 5.8%. That means four years into tort reform, and after the widely touted reduction in premiums, Louisiana drivers were paying 39.1% more for insurance than they did before the bill passed.
The decrease was just for private vehicle auto insurance. Homeowners insurance rates increased. Commercial insurance increased. Overall, the drop in insurance premiums for 2025 was .4%.
So the legislature had a great idea: more tort reform! After even more sweeping reforms in 2025, the public relations machine has roared back to life to tell us about how dozens of auto insurers have proposed rate decreases for 2026. Not all of those proposed cuts have been published, but those that have appear to be in the 5-6% range. If you’re doing the math, that means in 2026, Louisiana drivers can expect to pay about 32.84% more than they did in 2020, when the rumor was tort reform would lower their rates by 25%.
As in 2026, this small bit of good news applies only to private auto policy holders. Homeowners and commercial insurance premiums are still trending upward.
These are just two examples among the many times consumers and businesses have been promised big cost savings if only they limit the rights of injury victims and found out too late that they were getting nothing in return. If you’re ever injured and need legal guidance, our team at The Hartman Law Firm can help.
So Where Does All That Cost Savings Go?
In short, into the insurance companies’ pockets. In 2025, the country’s largest insurer, State Farm, posted a $12.9 billion profit. That’s more than double 2024 profits. Progressive was close behind, with profits of $11.31 billion. Allstate posted $10.2 billion in profits, while GEICO trailed behind with just $6.824. Together, the five largest insurers profited more than $45 billion last year.
Some companies, including State Farm, did pay a dividend to policyholders. After payment of the dividend, State Farm still saw a nearly 50% increase in profits from 2024 to 2025.
What Does All This Mean for Tort Reform?
The bottom line is that tort reform is often billed as a way to save business and consumers money on their insurance premiums. But, there’s no guarantee of those savings, and often premiums continue to increase despite lower costs for the insurance carrier and ever-increasing profits. During the many hearings the South Carolina legislature held on tort reform during 2025, not a single representative from a single insurance company showed up to say they planned to reduce premiums if the legislation passed.
South Carolina tort reform is back on the legislative agenda for 2026. Watch this blog for updates, and tell your legislators you don’t want to hurt your neighbors and local businesses on the vague promise of cost savings.