Home and auto insurance rates have been at a steady climb over the past few years for a multitude of reasons.
Inflation and natural disasters have been the most obvious reasons. The increased costs for construction and repairs have also played a role.
Another driving factor for bumped up insurance premiums have been lawsuits.
According to the American Property Casualty Insurance Association (APCIA), nuclear verdicts, which are jury verdicts of $10 million or more, have risen too, with the top 100 verdicts going up 350% from an average of $64 million to $225 million in just the last six years.
The APCIA also says that the average American household pays more than a $4,200 "tort tax" due to unnecessary and abusive litigation.
Insurance research expert Lynne McChristian said increased litigation costs is trickling down to consumers.
"It's increasing the costs of the goods and services, including insurance," she said.
A trend known as third party litigation funding (TPLF) is also driving up the cost of litigation. TPLF is where the plaintiffs' attorneys bring in outside investors to try and influence the litigation process. In this situation, the victim is no longer in control of their own lawsuit and can't settle without the permission of the people who are financing these lawsuits.
"If there's an outside investor looking to profit off of an individual's lawsuit, they're going to try and influence that outcome," said McChristian. "We think mandatory disclosures are very important, that's inflating the cost of those awards because it gives people more time to argue the issues back and forth."
In order to keep insurance costs down, McChristian suggests allowing your insurance company to try and settle the respective claim.
"The insurance industry is highly regulated and there is a multitude of insurance protections to make sure you get what you're owed," McChristian explained.