Kemp’s legal overhaul is about to take effect — but will it bring down insurance costs?

But even Kemp’s GOP allies warn the impact on premiums could be modest. House Speaker Jon Burns has already tasked a legislative panel with reviewing how insurance rates are set, signaling more legislation might be on the way next year.

Credit: Miguel Martinez/AJC

Credit: Miguel Martinez/AJC

And Insurance Commissioner John King, who has crisscrossed the state defending the legal overhaul, said he will turn up the pressure on companies seeking rate hikes.

“I’m telling insurance companies now they have to do their part,” said King, a potential U.S. Senate candidate. “We are going to have public hearings and they’re going to have to justify raising rates. I don’t mind holding their feet to the fire.”

Even so, state law gives insurance commissioners power to review rates but only halt increases in limited circumstances.

Democratic opponents, who fought the bill at every step, say the measure is a giveaway to insurance companies that lacks any guaranteed relief for Georgia consumers.

Credit: AP

Credit: AP

“The truth is, this so-called reform was never about solving a real problem. The tort reform campaign has long been run on half-truths, selective anecdotes and outright misinformation,” said state Rep. Tanya Miller, a Democrat who helped lead the party’s charge against the bill.

And if rates do stabilize, Miller added, it will have more to do with the broader market than the new law.

“There was no crisis in our judicial system, and no credible data supports the claim that injured citizens seeking justice in a court of law caused insurance premiums to spike.”

‘A government handout?’

Miller and other Democrats point to Florida as a cautionary tale. Insurers there pushed lawmakers to tighten liability laws after claiming steep financial losses — only for a Tampa Bay Times investigation to show their affiliate companies posted billions in profit.

Florida Gov. Ron DeSantis and others who advocated for the changes say the state’s insurance market is slowly stabilizing after years of problems, while opponents say it hasn’t lowered insurance premiums and never will.

In Georgia, insurance companies largely stayed in the background as the legislation advanced. The fight was led by business groups and Republican leaders who have sought similar changes for decades. Kemp took point, casting opposition to the bill as a mortal threat to Georgia’s economy.

“It is clear the status quo is unacceptable, unsustainable and jeopardizes our state’s prosperity in the years to come,” said Kemp.

Facing fierce Democratic opposition, Kemp had to rely almost entirely on the Legislature’s GOP majority to pass the bill. Still, it took extraordinary arm-twisting and multiple concessions to narrowly pass the bill.

Credit: Miguel Martinez/AJC

Credit: Miguel Martinez/AJC

The final version limits when businesses can be sued for certain injuries on their properties, regulates how damages are calculated in personal injury cases and allows some trials to be split into two phases, which could limit some jury awards.

Some experts predict the impact will be uneven. Businesses and commercial property owners might see relief on liability coverage, while consumers might not notice much difference in auto or other insurance rates. Critics argue the biggest winners are insurers.

“Despite record profits, insurance companies are getting a government handout,” said Bruce Hagen, a prominent personal injury attorney. “Meanwhile, every Georgia citizen who is injured through no fault of their own will now be severely hampered in their ability to be made whole for their losses.”

Paul Nair, CEO of boutique grocer Savi Provisions, sees it differently. Insurance costs have become a major barrier to growth, he said, especially in underserved areas.

“We went to try to get liability insurance, and 15 out of the 17 refused to underwrite the insurance,” Nair said. “Our premiums were extremely high. At some point, it kind of defeats the purpose we’re trying to do — addressing food deserts.”

It’s not just business owners feeling the pinch. The average annual premium for full coverage auto insurance in Georgia jumped last year to $2,610 — $67 higher than the national average, according to Bankrate. And some homeowners’ insurance rates have soared.

But even supporters say patience is crucial. Georgia Chamber of Commerce CEO Chris Clark called the law a “generational” achievement that could particularly help rural areas where competition for coverage is thin. Still, he cautioned that any real change will take time.

“None of this is an overnight fix,” he said, “but I do think it stabilized the market, and it sends the right messages to businesses.”

What’s in the bills?

Premises liability: Limits when businesses can be sued for injuries that occur on their property, with exceptions for some victims of sex crimes.

Damages: Allows plaintiffs to present jurors actual medical costs as well as initial bills, which sometimes reflect inflated charges.

Bifurcated trials: Allows cases to be split into two stages — first determining fault, then assessing damages — rather than considering everything at once. Judges would have discretion to reject splitting trials in cases with damages below $150,000 and those involving sex crime victims who “would be likely to suffer serious psychological or emotional distress” from testifying a second time.

Seat belt laws: Allows juries to consider whether a plaintiff was wearing a seat belt in injury lawsuits, potentially reducing damages for those who failed to buckle up. Judges would have discretion to determine how seat belt evidence can be used.

Attorneys fees: Prohibits attorneys from recovering their legal fees twice in certain cases.

Third-party financing: It requires third-party groups that invest in litigation to register with state authorities. It also bans foreign adversaries and governments from bankrolling litigation.