Are Personal Injury Attorneys To Blame?

Over the past year, the price of car insurance has increased 6.4%, according to the April 2025 Consumer Price Index (CPI). That increase is a continuation of the price surge observed over the past several years. An uptick in personal injury litigation is one of the factors linked to increasingly expensive premiums.

Rising Car Insurance Rates

Car insurance rates have been increasing every month since December 2021. The surge in pricing has slowed somewhat in recent years, but it hasn’t stopped. According to Value Penguin, in 2023, they went up 12%, and in 2024, they went up 16.5%.

The upward trend is expected to continue in 2025 with an anticipated increase of 7.5%. Rising car insurance premiums can make the cost of owning a car, especially if financed with an auto loan, all the more expensive.

Litigation and Insurance Premiums

A study commissioned by LexisNexis Risk Solutions found that 85% of claimants were approached by an attorney after they were involved in car accident. Among those who decided to hire an attorney, more than half ended up with a higher settlement amount.

Marketing tactics, including billboards and television ads, have been linked to a growth in product liability and personal injury cases.

Third-party litigation can increase costs for insurers who have to pay for legal expenses and potentially higher settlements. And these costs translate into higher premiums for consumers.

Other Factors Behind the Rise

While litigation has a role to play in premium prices, it is part of a larger convergence of factors. Car insurance prices are also being driven up by:

• Risky driving behavior: Risky driving behavior is a persistent concern. Violations for distracted driving and driving under the influence are increasing, leading insurers to up their pricing.
• Increase in claim severity: The severity of auto insurance claims has increased since the COVID pandemic, adding to insurers’ costs.
• Increased repair costs: Material and labor is getting more expensive, which in turn affects premiums.

The Bottom Line

Most of the factors, including litigation activity, leading to the increase in car insurance rates are outside of the individual driver’s control. Consumers can costs by bundling insurance policies and seeking discounts for their responsible driving habits. And they can shop around to get the best possible rate.