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Georgia’s legal landscape changed dramatically on April 21, 2025, when Governor Brian Kemp signed Senate Bills 68 and 69 into law — the most sweeping overhaul of the state’s civil justice system in two decades. The legislation was sold, in large part, on a simple promise: reduce lawsuit abuse, and insurance rates will follow. But will they?
To understand what’s at stake, it helps to understand just how bad things had gotten. Georgia had earned the unenviable title of the nation’s “#1 Judicial Hellhole” in 2023, according to the American Tort Reform Foundation’s annual ranking, and remained in the top five in 2024. “Nuclear verdicts” — jury awards in the tens or hundreds of millions of dollars — were becoming routine in Georgia courts, and insurers had responded by dramatically raising premiums across the board.
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The numbers behind Georgia’s litigation crisis were striking. The Insurance Information Institute estimated that excessive litigation had imposed a “tort tax” of $1,415 per year on every Georgian, while costing the state an estimated 137,000 jobs annually. Auto insurance rates surged by 21% in 2024 alone — one of the highest increases in the nation. Businesses operating in Georgia faced some of the most unpredictable liability exposures in the country, and commercial insurance markets were beginning to thin out as carriers reassessed their presence in the state.
The culprits, according to proponents of reform, were several well-documented practices. “Phantom damages” — where plaintiffs claimed the full, inflated sticker price of medical bills rather than what was actually paid — routinely generated verdicts untethered from real-world costs. “Anchoring,” whereby plaintiff attorneys would suggest astronomical figures for pain and suffering during closing arguments, primed juries to deliver outsized awards. Third-party litigation financing, often from foreign-based investment funds, was fueling an arms race in high-stakes litigation. Something, in the view of the business community and the Kemp administration, had to give.
Perhaps the most consequential change for insurance actuaries is the elimination of phantom damages. Under the old regime, plaintiffs could introduce the full “chargemaster” rates billed by hospitals — figures often two to five times what an insurer actually paid. SB 68 now caps medical damage claims at the reasonable value of medically necessary care, using actual insurance payments as a benchmark. For insurers, this is a direct shot at one of the biggest drivers of inflated verdicts. Defense attorneys can now introduce evidence of what health insurers, Medicare, or Medicaid actually paid, cutting through the fiction of billed-but-never-collected medical charges.
Under the new law, attorneys cannot suggest a specific dollar value for pain and suffering until the close of evidence — and only if the figure is “rationally related to the evidence.” The days of a plaintiff’s lawyer standing before a jury and suggesting $50 million in pain-and-suffering damages by referencing a sports star’s salary or a piece of artwork are over. This single change is expected to have a meaningful dampening effect on nuclear verdicts, which have been the most unpredictable and costly elements of Georgia’s litigation environment.
For cases involving more than $150,000, any party may now request that trials be split into separate phases for liability and damages. This procedural change matters enormously for insurers: a jury that has first determined fault in the abstract — without hearing about a victim’s suffering — is less susceptible to the emotional dynamics that drive runaway damage awards. It allows verdicts to be grounded in evidentiary reality rather than sympathy.
SB 69 takes direct aim at the third-party litigation financing industry. Foreign-based entities are now prohibited from funding Georgia lawsuits. Domestic financiers must register with the Georgia Department of Banking and Finance, disclose their involvement, and are subject to discovery. The law even creates potential liability for financiers in cases they fund. For insurers, this matters because outside money was enabling plaintiffs to hold out for ever-larger settlements, distorting the economics of reasonable resolution.
“The tort reform bill passed today by the Georgia House is an essential step to stabilizing the Peach State’s personal and commercial lines insurance markets.” — Mark Friedlander, Insurance Information Institute
The insurance industry is cautiously optimistic. Supporters argue the reforms will reduce claims costs, make risk more predictable, and ultimately allow carriers to compete more aggressively for Georgia business — which should, over time, drive premiums down. The logic is straightforward: lower verdicts mean lower claim reserves, which means lower premiums.
But critics point to a less encouraging track record. Studies of tort reform in other states — notably Florida, which enacted sweeping reforms in 2023 — have shown that savings from litigation reductions do not always flow to consumers in the form of lower premiums. Florida’s auto insurance rates actually continued rising after its 2023 reforms took effect, frustrating policymakers who had expected faster relief. The disconnect isn’t surprising to economists: insurance premiums reflect many variables beyond litigation costs, including reinsurance markets, inflation in healthcare and repair costs, and weather-related claims that have nothing to do with lawsuits.
Georgia’s critics of SB 68 noted pointedly that insurers provided no data or binding commitments to justify the expectation of premium relief. The Georgia Rights Alliance observed that insurance industry profits were already at record highs when the bill passed. Without any regulatory mechanism to require that litigation savings be passed to policyholders, there is nothing to stop carriers from simply improving their margins.
The honest answer is that Georgia’s tort reform will very likely reduce some insurance costs — particularly in commercial lines, premises liability, and trucking, where nuclear verdicts were most concentrated. Businesses that operate retail stores, apartment complexes, or warehouses should see some relief in their general liability premiums as the negligent security provisions take hold and the phantom damages rules reduce verdict exposure.
For individual consumers buying auto or homeowners insurance, the picture is murkier. Those policies are driven by factors that SB 68 doesn’t touch: the frequency of accidents, the cost of car repairs and medical care, weather events, and the inflation that has hit every corner of the economy since 2021. It is reasonable to expect that premium increases will moderate somewhat, but Georgians should temper expectations about dramatic rate cuts appearing on their next renewal notice.
What the law does accomplish, more clearly and immediately, is making Georgia’s liability environment more predictable for businesses deciding whether to locate, expand, or insure operations in the state. That is not a trivial benefit — a more stable legal climate attracts more insurers, which creates more competition, which can ultimately benefit consumers. But the timeline for those benefits to materialize is measured in years, not months. For more information on Georgia’s Tort Reform or for assistance with a personal injury case, contact Chattahoochee Injury Law today.
Next in this series: Part 2 examines the real-world consequences of the reform, including several that its architects may not have anticipated.
