Who Pays the Most for Malpractice Insurance?

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Purchasing medical malpractice insurance can be a costly expense for medical professionals, especially in recent years with premiums on the rise. Premiums have risen so much that many doctors have been forced to move to states that offer lower premiums or stop practicing medicine altogether. Regardless, there are ways that you can reduce medical malpractice insurance rates.


The average cost of insurance can vary from city to city or state to state, but that’s not the only consideration taken into account to determine rates. Let us first offer a brief overview of why premiums vary so much.



Geographic Location: One of the major considerations when determining malpractice insurance rates is the state where a professional practices medicine. Many insurance providers will look at the set insurance rates as well as the potential for malpractice lawsuits in that state and branch of medicine.

The cost of medical malpractice insurance is a significant expense for medical professionals.  You may have asked yourself, "Who pays the most for coverage, and why?" 


There are several factors that medical malpractice insurance underwriters take into consideration when pricing a health care provider's insurance policy. 


These items include:

  • Location
  • Specialty
  • Board Certification
  • Frequency of Claims
  • Severity of Claims
  • When a Claim(s) Occurred
  • Requested Limits


Knowing how these factors can impact you and your policy pricing can help you better understand how to get the best coverage at the best price, whether you are a physician joining a practice, or starting your own. 


Read on to better understand how pricing of medical malpractice insurance policies works. 


Location, Specialty, and Board Certification


-Location: 

Physicians will always be asked what state and county they will be practicing in.  Pricing for med mal insurance can vary significantly state-to-state.   This can be due to several factors, including whether or not there are limits (or caps) on damages in the state (caps tend to help lower costs), and what the typical limits of coverage are in the state (the higher the limits, the higher the cost). 


Regarding counties, again, pricing can vary significantly.  The cost of medical malpractice insurance is often higher in large cities due to the higher population and often, the higher number of claims. 


-Specialty:   

A physician's specialty can also have a major impact on the cost of a policy.  In short, the higher risk the specialty, the higher the cost of the policy.  Ie, OB/Gyns, Surgeons, and Anesthesiologists see some of the highest premiums. 


-Board Certification: 

Physicians who are not Board Certified will almost always pay higher premiums than Board Certified physicians. 


 




Claims and Limits


Two additional factors that significantly influence the pricing of a medical malpractice insurance policy include both the claims history of the physician and the limits requested on the policy. 


-Frequency of Claims:

This refers to how often claims have occurred. The more frequent a provider's claims, most likely the higher the insurance premium.   


-Severity of Claims:

This refers to how large the payout(s) for the claim(s) are.  The higher the payout(s), most likely the higher the insurance premium. 


-When a Claim(s) Occurred:

Claims that occurred 10 or more years ago generally no longer impact the pricing of a med mal insurance policy.  Thus, if you have had claims in the past 10 years, your premium may be higher. 


-Requested Limits:

If you request higher than the typical limits, the cost of your insurance policy will increase.  More coverage results in higher premium.


-Shopping for Coverage:

In order to avoid paying higher than necessary premiums, you should use a broker/agency, like Nexus, that can provide you with multiple quotes from a variety of carriers.


Can we help you get coverage?  Click the Get a Free Quote button at the top of your screen today!