Rising liability insurance costs continue to outpace general economic inflation, adding an estimated $274.8 billion to $337 billion in losses and related expenses between 2016 and 2025. Triple-I’s research examines personal auto, commercial auto and general liability insurance, finding that rising claim severity remains a key driver of increasing losses. These trends contribute to higher insurance premiums and affordability challenges for consumers and businesses.
Quick Summary
- Increasing inflation added $274.8 billion to $337 billion in estimated liability insurance losses and defense and cost containment expenses from 2016 to 2025.
- Commercial auto liability experienced $60.8 billion to $86 billion in additional losses, representing 24% to 34% of booked losses.
- Other liability occurrence coverage experienced the largest dollar impact, with $106.7 billion to $125 billion in additional losses and related expenses.
Rising Claim Severity Drives Liability Insurance Costs
Claim severity, or the average cost of an insurance claim, continues to grow faster than general economic inflation across the four insurance lines studied. Increasing inflation accounted for an estimated 16% to 19.6% of combined auto and general liability booked losses from 2016 to 2025.
Inflation Impacts Vary by Insurance Line
Personal auto liability experienced $101.6 billion to $120.1 billion in additional losses and related expenses, while product liability occurrence coverage recorded $5.7 billion to $5.9 billion. All four insurance lines showed a greater dollar impact and a larger share of booked losses compared with the previous study.
