Georgia Insurance Costs Rising: Trends, Legislative Response, and Premium Reductions

Insurance costs are trending upwards in Georgia, posing challenges for both consumers and providers. According to Robert Hoyt from the University of Georgia's Terry College of Business, Georgia ranks last in insurer profitability when compared to other states and the District of Columbia. He discussed these trends at a recent legislative committee meeting focused on insurance rates. With an 8.7% decline in profits, compared to a national average increase of 7.8%, Georgia's insurance market becomes less appealing to carriers, potentially resulting in reduced competition and higher insurance premiums.

The House of Representatives' Blue-Ribbon Study Committee on Insurance Rates held its final meeting in Gwinnett County, capping off a series of discussions across Atlanta, Savannah, and Macon. During these meetings, some positive developments emerged. Notably, three insurance companies announced plans to reduce auto policy premiums, credited to recent anti-fraud measures and tort law changes. Specific rate cuts include a 5.1% reduction by Safeco Insurance Company of Illinois, a 4.9% decrease by Safeco Insurance Company of Indiana, and a 5.7% reduction by Liberty Mutual, aimed at improving market conditions.

However, concerns within the industry persist. Insurers face scrutiny over claims practices, with numerous complaints regarding delayed or denied payments. Auto repair firms report insurers sometimes reimburse less than the necessary amount to restore vehicles to original specifications. Similarly, in the medical insurance sector, regulatory compliance requirements around what is deemed 'medically necessary' often obstruct access to vital treatments and equipment. The committee, led by Rep. Matt Reeves, plans to investigate these issues further, focusing on pricing, underwriting, and claims management processes. They aim to propose new legislation addressing insurance affordability and fostering a more equitable insurance landscape in Georgia.