Across the nation, successful individuals are feeling the pinch of rising personal line premium costs. While most headlines focus on recent catastrophic weather-related losses – such as Hurricane Ida which caused $65 billion in damage in 2021 – there are other factors impacting climbing premiums. Carriers leaving risk-prone areas increases demand, supply chain disruptions require longer rental terms, and rising medical treatment costs are just a few issues that are contributing to the cost of your policies.
But relatively few people are talking about how third-party litigation funding (TPLF) is driving insurers to raise premiums due to high-profile lawsuits, large jury awards, and increasing legal expenses.
WHAT IS THIRD-PARTY LITIGATION FUNDING?
The rise of legal system abuse is casting a shadow over the insurance industry. TPLF, a practice where outside investors finance lawsuits in exchange for a share of the settlement or judgment, can significantly inflate coverage costs.
TPLF allows investors like hedge funds to bankroll lawsuits without being directly involved in the case. The lack of regulation and transparency surrounding TPLF has fueled concerns about its ethical implications and…
