Protecting American Consumers Together said PACT Consumers announced on Jan. 30 that highway billboard attorneys promoting frivolous lawsuits were contributing to higher insurance premiums in New York.
The announcement draws attention to the impact of legal advertising and litigation on insurance costs for drivers and small businesses. According to PACT Consumers, aggressive marketing by personal injury law firms is part of a broader environment that can lead to more claims and prolonged litigation, which may increase settlement costs for insurers and businesses.
Advertising by personal injury law firms has increased significantly in the United States over the past two decades, including large-format billboards along major highways promoting legal services tied to accidents and injury claims. Critics say aggressive marketing of legal services can encourage more claims and prolonged litigation, which may increase settlement costs for insurers and businesses. Tort reform advocates and consumer groups point to the advertising environment as part of a broader litigation landscape they say contributes to rising insurance costs and financial pressure on drivers and small businesses, according to Manual.
Insurance analysts have linked claim frequency and settlement severity to increases in auto insurance premiums. In New York, the Department of Financial Services reported that average auto insurance premiums have risen in recent years as insurers faced higher claim payouts, litigation expenses, and medical claim costs tied to accident cases. When settlements increase or cases take longer to resolve, insurers often adjust pricing models to maintain solvency, which can result in higher premiums for policyholders, according to Manual.
Legal advertising spending reflects the size of the litigation marketplace. Research by Kantar and other industry trackers shows U.S. personal injury lawyers collectively spend more than $1 billion each year on advertising across television, digital platforms, and billboards. Major metropolitan areas and highway corridors often have dense billboard placement because of heavy commuter traffic and accident exposure. Industry observers say competition for advertising can intensify the pursuit of claims and referrals, increasing the overall volume of litigated accident cases nationwide, according to Manual.
PACT Consumers is a U.S.-based advocacy organization that focuses on consumer protection, regulatory transparency, and public awareness campaigns related to litigation, insurance costs, and economic policy issues according to PACT Consumers.
