USA Law and Practice Contributed by: Christina Culver, Rhonda Thompson and L. Michael Brooks, Thompson, Coe, Cousins & Irons, LLP
disclosure of TPLF entities are helpful tools in combat- ing these practices. 5.5 AI-Driven Claims Volumes and Complaints As with litigation, AI also provides a notable increase in claim volumes. Pro se claimants rely heavily on AI claim presentment tools, demands, causes of action and untested evaluations, which make it even more challenging to reach claim settlement. As a result, claims without merit or with questionable coverage may be more susceptible to payment, increasing loss ratios and having an eventual impact on overall pre- mium rates. 6. Third-Party Claims and Defence Trends 6.1 Third-Party Claims and Direct Actions As a general rule, an injured third party is not in privity with the tortfeasor’s liability insurer and cannot sue the insurer directly. In the absence of a statute or a policy provision to the contrary, the claimant must first obtain a settlement or judgment against the insured, unless it holds an assignment of the insured’s rights or is a judgment creditor. Direct actions are therefore the exception, most often seen in auto and general liability disputes. A minority of states permit direct actions by statute. Louisiana’s direct-action statute was significantly narrowed in 2024 and now allows a direct claim only where one of seven conditions applies, such as the insured’s insolvency, bankruptcy, or death, or where the insurer defends under a reservation of rights (La. R.S. 22:1269). Wisconsin makes a liability insurer directly liable up to policy limits and a proper party defendant in negligence actions, subject to a territo- rial limit for out-of-state policies (Wis. Stat. §§ 632.24, 803.04). Where no direct-action statute applies, claim- ants reach insurers through third-party beneficiary theory, equitable garnishment, or assignment of the insured’s claim. 6.2 Emerging Liability and Defence Trends The dominant trend shaping defence of claims against insureds is social inflation and the rise of nuclear and thermonuclear verdicts. Studies show juror sentiment
has shifted decisively towards plaintiffs, with growing support for large punitive awards and a pronounced generational divide, driving higher awards across sectors. Third-party litigation funding is a significant accelerant, increasing case volume, extending time- lines, and raising defence costs and settlement val- ues. These pressures are prompting responses on two fronts. States are increasingly regulating litigation funding through disclosure requirements and, in North Carolina, an outright ban on covered investments. Co-ordinated mass-tort campaigns continue to pro- duce outsized verdicts subject to post-trial challenge. Insurers are responding with earlier case resolution, enhanced reserving, and support for tort-reform leg- islation aimed at “Reptile-style” tactics and funding transparency. 7. Geopolitical Factors 7.1 Geopolitical Drivers of Insurance Disputes Historically, a primary impact on the insurance and reinsurance market in Texas has been catastrophic weather events in the form of tropical storms and hurricanes. In 2025, the United States experienced 84 natural catastrophe events. Texas ranked third nationally in wildfires and led the nation in tornado and hailstorm events. An ongoing political discussion is whether these weather events can be attributed, at least in part, to global warming. Trade tensions, global conflicts and sanctions impact this jurisdiction, particularly due to costs associated with increased material rationing, lack of supplies and the costs associated with repairs and rebuild- ing. Likewise, Texas’s construction industry utilises an ethnically diverse workforce. The instability in fed- eral immigration policy has had a direct impact on the availability and reliability of this workforce to respond in both catastrophic and non-catastrophic arenas. 7.2 Sanctions and Payment Challenges Any additional restriction or sanction associated with increased cost-of-claim resolution impacts the ability of a carrier to resolve claims in both first and third- party contexts. For example, travel restrictions can
302 I NSURANCE L I T IGATI O N 2026
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