U.S. auto and general liability insurers incurred an estimated $274.8 billion to $337 billion in additional losses and related expenses between 2016 and 2025 beyond what general economic inflation alone can explain due to the escalating impacts of legal system abuse, according to updated research from the Insurance Information Institute (Triple-I).

The study, Increasing Inflation Impact on Liability Insurance as of Year-End 2025, found these additional costs represented 16% to 19.6% of total booked losses across the liability insurance lines examined. The updated estimates were higher than those in Triple-I’s previous study covering 2015 through 2024.

“Legal system abuse is contributing to liability costs that are rising well beyond general inflation, putting additional pressure on insurance affordability for consumers and businesses,” said Sean Kevelighan, CEO of Triple-I. “The report’s findings reinforce the need to address excessive litigation costs and promote a balanced legal environment that supports fair compensation for injured parties without imposing unnecessary costs on everyone else.”

Key findings include:

  • Personal auto liability: Increasing inflation added an estimated $101.6 billion to $120.1 billion in losses and defense and cost containment expenses, representing 9.1% to 10.8% of booked losses. Bodily injury claim severity is now 62.4% above pre-pandemic levels.
  • Commercial auto liability: Additional costs totaled $60.8 billion to $86 billion, accounting for 24% to 34% of booked losses. Claim severity increased at a compound annual growth rate of 8.2% from 2016 to 2025, even as claim frequency remained below pre-pandemic levels.
  • Other liability occurrence: This category experienced the largest dollar impact among the lines studied, with additional costs of $106.7 billion to $125 billion, representing 31.4% to 36.8% of booked losses. Losses in this category are now 70.5% above 2017 levels.
  • Product liability occurrence: Increasing inflation added $5.7 billion to $5.9 billion, representing 32.3% to 33.6% of booked losses. Claim severity has increased more than fivefold since 2016, growing at an annual rate of 22.8%. Increasing inflation accounted for approximately 51.5% of booked losses in this line in 2025 alone.

Across the four lines studied, claim severity, rather than claim frequency, remains the principal driver of rising liability costs.

“Without meaningful moderation in claim severity, insurers will continue to face rising cost pressures, with implications for insurance affordability and availability for businesses and consumers,” said Kevelighan.

The updated analysis was conducted independently by Triple-I, building on methodology used in research published jointly with the Casualty Actuarial Society (CAS) in October 2025. Drawing on National Association of Insurance Commissioners (NAIC) Schedule P data and historical loss development patterns, the analysis compares actual insurance losses with expected losses to estimate additional liability costs. Differences in historical loss development patterns account for the range of estimates.

The full report provides detailed findings and methodology across the liability insurance lines studied.

About the Insurance Information Institute (Triple-I)

Since 1960, the Insurance Information Institute (Triple-I®) has been the trusted voice of risk and insurance, delivering unique, data-driven insights to educate, elevate and connect consumers, industry professionals, policymakers, and the media. An affiliate of The Institutes, Triple-I represents a diverse membership accounting for nearly 50% of all U.S. property/casualty premiums written. Our members include mutual and stock companies, personal and commercial lines, primary insurers and reinsurers – serving regional, national and global markets.

Triple-I is a registered trademark of the Insurance Information Institute. All rights reserved.

About The Institutes

The Institutes® are a not-for-profit dedicated to helping people and organizations succeed in the essential disciplines of risk management and insurance. Through numerous affiliated business units and brands, we educate, elevate, and connect students, professionals, and organizations by equipping them with the knowledge, skills, and collaboration they need to tackle the most complex risk management and insurance challenges. Backed by more than 115 years as a trusted knowledge partner, we empower people and organizations to create a more resilient world.

The Institutes is a registered trademark of The Institutes. All rights reserved.

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