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So, this probably covers close to 50% of the population, if not 50% - I would have thought we would see some cost decrease by now if it were going to happen.

Interesting.

Perhaps then, there is a different problem that needs to be addressed. It would be interesting to see what the total of large awards are as compared to the total damage payouts by insurers. Of course, defining "large" would be an issue. Perhaps we need to look at the non-economic damanges in states without caps. How much of the total damage payout is damages in excess of some proposed cap? If it's a pretty small percentage, then implementing a cap won't have a significant affect on insurance premiums.

It might also reflect a shift from non-economic damages to economic damages.

When a plaintiff is truly injured, they aren't necessarily interested in how the settlement is broken down. They probably care more about the total. Before there were caps on non-economic damages, no one really cared how the damages were broken down. With the caps, plaintiffs now have an incentive to find every economic damage they can.

And we also need to look at the nuisance end of claims. If it would cost your insurer $20k to mount a vigorous defense of a marginal claim, and the plaintiff comes along and offers to settle for half of that, you can bet that the insurer will take the settlement vs. pressing on with a defense. It's the right economic decision when looking at one claim at a time. But looking at a bigger picture, if mounting one $20k defense will keep you from having to mount similar defenses in the future, then it might make sense to go ahead with that defense. I'm not sure how well insurance companies are able to make that kind of decision. And, of course, there is the problem of each case being pretty unique, especially in the medical malpractice area.

--Peter
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