{"id":118526,"date":"2026-01-15T10:15:04","date_gmt":"2026-01-15T15:15:04","guid":{"rendered":"https:\/\/www.citizen.org\/?post_type=news&p=118526"},"modified":"2026-01-22T16:58:34","modified_gmt":"2026-01-22T21:58:34","slug":"the-tort-reform-racket","status":"publish","type":"news","link":"https:\/\/www.citizen.org\/news\/the-tort-reform-racket\/","title":{"rendered":"The \u201cTort Reform\u201d Racket"},"content":{"rendered":"

TL:DR The insurance industry is denying more and more claims and running a nationwide strategy to deny your right to sue them when you\u2019re shortchanged.\u00a0<\/span><\/i><\/p>\n

If you follow how state governments around the country are responding to the insurance crisis like I do, the one phrase you\u2019ll hear more than any other is \u201ctort reform.\u201d Sounds nice, right? But the reality is that tort law is the only real leverage policyholders have when insurers stall or shortchange them.<\/span><\/p>\n

A \u201ctort\u201d is the legal term for when a person or a company harms or injures someone. Tort law simply is the legal framework people can use to sue when that happens. So-called tort \u201creform\u201d includes capping damages, shortening filing deadlines, restricting who can sue, and denying people\u2019s right to sue a company altogether.<\/span><\/p>\n

Public Citizen has been fighting corporate-backed \u201ctort reform\u201d for <\/span>decades<\/span><\/a> across <\/span>industries<\/span><\/a>. Without fail, tort reform efforts are an attempt to shield corporations from justice and pad their profits.<\/span><\/p>\n

A real climate crisis and a manufactured legal one<\/b><\/p>\n

Our current insurance crisis is a product of climate-driven extreme weather that is more frequent, more destructive, and more expensive\u2014not lawsuits. Wildfires fueled by heat and drought plague the West. Hailstorms batter the Midwest. Hurricanes grow stronger and reach farther inland, while catastrophic flooding now affects places from Texas to Vermont to New York City. Many communities are still recovering from one disaster when the next one hits.<\/span><\/p>\n

Instead of strengthening protections for policyholders, insurers are raising rates, cutting coverage, abandoning communities, and denying claims. Renters feel the effects through higher rents. Homeowners often learn only after disaster strikes that coverage was quietly reduced.<\/span><\/p>\n

This is a real insurance crisis for working Americans. According to <\/span>Insurify’s 2026 survey<\/span><\/a>, more than half of homeowners (57%) have made sacrifices to afford home insurance, including taking on debt (15%), borrowing from friends\/family (12%), and skipping meals (10%).\u00a0<\/span><\/p>\n

\u201cSocial inflation\u201d: insurance industry\u2019s fabricated scapegoat<\/b><\/p>\n

In order to justify rate hikes and strip us of our right to due process, insurers blame <\/span>\u201csocial inflation\u201d <\/span><\/i>for rising costs. \u201cSocial inflation\u201d is an industry-coined term used to pin rising costs on lawsuits, juries, and trial lawyers. According to their narrative, out-of-control lawsuits and runaway verdicts force them to raise rates.<\/span><\/p>\n

The idea that judges and juries nationwide are being routinely duped by plaintiffs\u2019 attorneys who somehow outmatch the trillion-dollar insurance industry and its legal teams strains credulity. A far more plausible explanation is the simplest: insurers frequently deny, delay, or underpay valid claims, and reasonable people turn to the courts. <\/span>This isn\u2019t legal system abuse, it\u2019s a policyholder\u2019s last line of defense against a racket.<\/i><\/b><\/p>\n

Denying claims and blaming the courts<\/b><\/p>\n

When I dug into the insurance industry I found startling statistics. While insurers complain about litigation, they are increasingly refusing to pay claims at all.\u00a0<\/span><\/p>\n