The costs of medical malpractice insurance are higher than most. There are a variety of different factors that dictate the exact cost, and your cost might be different than another medical professional’s cost. In this article, we will look at four important things to know about malpractice insurance costs.
- Cost fluctuates with the economy.
- Costs are difficult to generalize.
- Cost isn’t everything but is an indicator.
- The cost depends on coverage.
Have you ever wondered why you had a premium increase even though you didn’t have any claims against you? That is because malpractice costs fluctuate with the economy. Now, as frustrating as it may be, it is also a double-edged sword because the same economy that raises your prices could also lower your prices. The biggest economic indicator that impacts premiums is inflation. As prices inflate, the cost to payout or cover a claim increases. To compensate for this, insurance carriers must simultaneously inflate their prices to stay afloat. Luckily, as inflation declines, that leaves more room for carriers to lower and adjust premiums.
The nation’s average premium for a surgeon is around $40,000, whereas the average premium for a pediatric doctor is $8,000. Similarly, the average surgeon premium in Missouri is $28,000 whereas the same premium in Florida is $50,000. Statistics such as these suggest that a malpractice premium can’t be generalized, rather, malpractice premiums vary vastly depending on factors such as line of practice, state, claims history, etc. When it comes to assessing your malpractice cost, be sure to dive into factors such as these to determine ways to lower costs without frustration.
Pricing isn’t everything, but it can and should be used as an indicator. Higher costs aren’t always a bad thing. Often, higher costs equate to better coverage, which in some instances is worth it. You should use cost as an indicator in assessing the quality and strength of your coverage and carrier because the cheapest price isn’t always the best price. Rather, it is more important to know the financial strength and quality of care offered by your carrier.
As mentioned, pricing is an indicator of coverage. Likewise, coverage is an indicator of pricing. Assessing your coverage is important in determining why costs are changing. There are two main types of coverages:
- Claims-made Coverage
- Occurrence Coverage
Claims-made coverage is ideal for someone looking to make a long-term career out of their practice. Claims-made is a less expensive coverage that increases in price incrementally for five years until it “matures”. At maturity, the price will remain relatively stable throughout the duration of your career, whereas at the end, you often get free retirement tail coverage. Occurrence coverage is drastically more expensive given the nature of the coverage. When you purchase occurrence coverage, it encompasses tail coverage in the pricing from the beginning. Since occurrence allows any claim to be covered if it arose during the policy period, it is substantially more expensive as it provides an almost unlimited coverage period.
As you navigate your malpractice insurance costs, be sure to factor in the above points. Premiums are difficult to compare, which is why eQuote MD is the perfect business partner. At eQuote MD we represent all major carriers and can find you the best price for the best coverage that’s out there.
