Surface transportation re-authorization gives Congress
a timely opportunity to confront lawsuit abuse
and transportation affordability
Congress is preparing to write the next major highway bill, which will cost hundreds of billions of dollars, and yet one obvious affordability issue is barely part of the conversation: lawsuit abuse and its effect on auto insurance costs. Fixing it will not require a new federal program or more spending. It will require political will to update liability rules that no longer fit the way Americans actually travel and work.
The House Committee on Transportation and Infrastructure, chaired by Rep. Sam Graves of Missouri, is expected to markup the Surface Transportation Reauthorization Act this month, with the existing Infrastructure Investment and Jobs Act set to expire September 30, 2026. The legislative calendar is tight, and the jurisdictional fights are real. But embedded in this reauthorization is a genuine opportunity to address something that affects every American who drives a vehicle far more directly than most of what will consume the committee’s attention: the lawsuit abuse epidemic making auto insurance unaffordable.
The increase in auto insurance premiums has been hard to miss; insurance premiums haven’t just ticked up, they’ve exploded. According to the Bureau of Labor Statistics, car insurance premiums have risen more than 50 percent since 2020. That is not primarily a function of repair costs or weather events or any of the other factors insurers cite in their actuarial filings. A significant catalyst for rapidly rising premiums is bad actors gaming the system of civil liability rules, often using the auto insurance claims process more like a revenue stream. The American Tort Reform Association estimates that lawsuit abuse costs households more than $6,600 per year in hidden costs across the economy, with auto insurance among the most direct and immediate components of that burden.
This problem often gets buried in the broader tort reform debate, which makes it easy to ignore. Fraud rings stage “fender benders” in specific counties where they know the local courts are friendly to plaintiffs. They generate documentation, file claims, and in many cases retain attorneys connected to the operation. Attorneys utilize fee-shifting statutes that make settlement cheaper than defense. For the insurers, paying out a settlement is often cheaper than fighting a rigged game in court, and they pass those costs directly to consumers. For most drivers, it functions like a hidden tax. They didn’t cause the problem, but they still pay for it every time the premium renews.
This is not a hypothetical scenario. It is a documented pattern in markets from South Florida to Los Angeles to the outer boroughs of New York. What makes this so frustrating is that this abuse often happens through legal and procedural rules that were meant to protect legitimate claims but are now being exploited. The solution, accordingly, is not simply better law enforcement, but structural reform of the litigation environment itself.
The cash incentives for fraudsters and litigants are well-documented and can be addressed. Florida provides a real and measurable example of reform. In 2023, the legislature passed comprehensive tort reform regarding property insurance, which resulted in a massive number of filings from litigants trying to cash in before the reforms took effect. Since then, property insurance rates in Florida have begun to stabilize. The auto insurance industry can benefit from similar relief efforts, as it is experiencing many of the same problems. When a system allows bad-faith actors to exploit it, the public pays the price in premium increases.
The surface transportation reauthorization is not an unusual venue for this kind of reform. Congress established exactly this precedent in 2005 when it passed the Graves Amendment. That provision clarified that vehicle rental and leasing companies could not be held automatically liable under state law for accidents caused by their customers. The reform was targeted, narrowly drawn, and effective in its purpose. It removed a litigation incentive that had no logical connection to actual fault, and it stabilized a segment of the mobility market that serves millions of Americans.
Twenty years later, the transportation landscape has changed substantially. Rideshare platforms and app-based delivery services now form a central part of how Americans move themselves and their goods. Rideshare companies now operate nationwide, but liability rules still vary sharply by state. That makes it easier for attorneys to steer claims into favorable venues and harder for companies to defend even dubious cases efficiently. Congress has an opportunity to fix this problem by extending the Graves Amendment’s underlying logic to these modern platforms, establishing consistent national liability rules that reflect how the mobility economy functions today.
States that have moved on tort reform by tightening venue rules, modifying one-way attorney fee statutes, and establishing clearer standards for bad faith claims have seen measurable market results. In several states, reforms aimed at litigation abuse have been followed by slower premium growth and, in some cases, actual rate relief. Florida’s own reforms in recent sessions, which addressed assignment of benefits abuse and attorney fee structures that had driven carriers from the market, are a case study the committee would be wise to examine.
Accountability matters, and legitimate victims of negligence deserve full recourse. If a driver is negligent, they should pay. But there is a world of difference between justice for victims and a legal system being manipulated by unscrupulous attorneys. The reform conversation is about proportionality, by ensuring that liability attaches to actual fault and ensuing settlement pressure does not substitute for adjudication of merit.
The argument for federal action is not that states cannot act, but that they cannot act fast enough or comprehensively enough to address a problem that does not respect state lines. Fraud networks are not local enterprises. They operate across markets, adjusting to reforms in one state by shifting activity to another. A federal baseline, applied through the reauthorization with the same targeted logic as the Graves Amendment, would close gaps that state-by-state reform leaves open.
Chairman Graves has spoken publicly about wanting to shore up the Highway Trust Fund and deliver a bill that gets federal dollars back to the states efficiently. Those are the right priorities for a transportation chairman. But the affordability of transportation extends beyond road construction budgets. For the worker in a mid-sized city who needs a car to get to work, auto insurance is not optional—it is a condition of employment. For the senior who relies on rideshare because driving is no longer viable, the continued availability and affordability of those services depend on liability rules that do not make them economically unsustainable to operate.
The surface transportation reauthorization is among the most consequential pieces of legislation this Congress will consider. The committee has the jurisdiction and the precedent to move forward with these needed reforms. If Congress wants to do something meaningful on transportation affordability, this is low-hanging fruit. Updating liability rules for today’s mobility market would not require a new bureaucracy or a major spending fight. It would simply make it harder for the legal system to be used as a cost mechanism against ordinary drivers, delivering direct, tangible relief to individuals and families who have been absorbing an invisible tax on their insurance premiums for years. That is a rare combination in federal policy and a compelling reason to act before this opportunity passes us by.
