The Liability Crisis and Its Ensuing Effects on the Property and Casualty Insurance Industry

The Liability Crisis of the 1980s occurred due to an expansion of Tort Law and was aided by other industry factors that caused increased premiums and made coverage harder to obtain. The Liability Crisis of the 1980s impacted the property and casualty insurance industry that prompted states to focus on alternative options to handle the increase in costs through regulation that changed the way the industry operated and ultimately affected the consumer. This research was important because no other research had been conducted determining the effects of this crisis on the industry. Using primary source material from state regulations passed since the 1980s, the findings indicated state regulation was the most important part of taming the crisis and determined how states would navigate future challenges in the industry. Balance between the consumer and the industry was most effective and necessary to make costs reasonable for the consumer and created a competitive marketplace for the carriers. State regulations were key to curbing the effects of the Liability Crisis. Regulations helped states to continue to find ways for consumers to obtain coverage while it also changed how the industry approached and did business in individual states.