by Emily Fansler
East Tennessee recently saw three local defendants sentenced for their roles in a multimillion-dollar prescription fraud scheme. Fraud on that scale understandably makes headlines. But what about schemes that, on the surface, seem to cause less damage? Or worse, the ones that go completely unnoticed?
Staged auto accidents and fraudulent insurance claims may not make the evening news, but that doesn’t make their consequences any less real. Small businesses, especially those with company vehicles, can be attractive targets. What looks like a simple fender bender to an onlooker may be anything but, with bad actors working behind the scenes to identify unsuspecting drivers they assume have deep pockets. That’s how a seemingly minor bump at a red light can turn into thousands of dollars in claims and legal bills. And too often, a business can find itself paying to defend against a claim even when it did nothing wrong.
That should bother every Tennessean, because not only does that impact a businesses ability to keep serving their customers – much less, create jobs – but those costs get passed on to every one of us. Take a look at the historical trend on insurance rates.
The Federal Reserve reported car insurance premiums have increased more than 50 percent since 2020. Abuse of our insurance and legal systems is at the center of the problem.
Staged accidents, fraudulent claims and frivolous lawsuits cost money to investigate and fight. Businesses hire lawyers. Insurers investigate claims. Cases can drag on or end in expensive settlements. Those costs then show up in higher insurance premiums for every policyholder, higher business expenses and ultimately higher prices for essential goods and services.
This issue is especially prevalent among rideshares.
When an accident involves a rideshare driver, lawsuits can target the company behind the app even when the company itself did nothing to cause the crash. Why? Because the company carries a large insurance policy. Instead of focusing liability on who actually caused the accident, our legal system can create an incentive to go after whoever has the deepest pockets. The consequences are similar to what we see with small businesses: higher fares for retirees trying to get to doctor’s appointments, less take home pay for drivers, and again, higher insurance rates across the board.
The problem with deterring these schemes is that they are shockingly lucrative. A recent analysis of more than 74,000 U.S. court cases found that jury awards more than doubled between 2020 and 2024, even after accounting for inflation and other factors. Separate research found that annual U.S. tort costs, including settlements and legal fees — exceeded $500 billion in 2022. The get rich quick trend of our legal system isn’t just hurting businesses or drivers.
An economic impact study determined all Americans, not just those involved in litigation, pay $1,666 per person in “tort taxes” each year. Additionally, the estimated job loss is 4.8 million annually. That’s not exactly a drop in the bucket. Congress needs to seize the opportunity to deliver real relief to American families.
The bipartisan BUILD America 250 Act includes a commonsense reform that would update liability rules to reduce lawsuit abuse and help drive down insurance rates. The idea is pretty simple: if a company does something wrong, hold it accountable. But a company shouldn’t automatically be held responsible for an accident simply because an independent driver was using its app.
As lawmakers return to Washington, Senator Marsha Blackburn and the rest of Tennessee’s congressional delegation have an opportunity to act. They should support the commonsense reform in the BUILD America 250 Act and make sure our legal system protects legitimate victims without rewarding abuse.
East Tennessee families have enough bills to pay. Paying for someone else’s abuse of the system shouldn’t be one of them.
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Emily Fansler is a mother, grassroots conservative activist, and former congressional staffer based in Knoxville, Tennessee.
