By Julie Danna
I was living in Panama City, FL when Hurricane Michael pretty much destroyed the community. The storm hit the Panhandle so quickly that we barely had time to prepare.
This experience made me reflect on the harsh, destructive medical malpractice insurance crisis that hit Florida back in the late 1990s/early 2000s. I remember going to many town hall meetings with my partner, Matt Gracey, where we’d listen to stories and pleas of desperate physicians and surgeons begging for help. How the carriers either pulled out of Florida or made it difficult for us to find coverage that our clients and prospects could afford.
Now I go to work each day knowing that we are about to revert back to those days, and I can’t help but wonder if it will be as quick as Hurricane Michael. Will the healthcare providers and facilities be prepared?
In 2014 and 2017, the court overturned the caps on non-economic damage awards on medical malpractice cases that the Legislature institute in 2003. Starting in 2003, premiums steadily decreased and then in the past few years the premiums stabilized and flattened. Now that tort reform has been fully overturned, we are already seeing the frequency and severity of claims rising, the carriers are now running at a loss, some have already pulled out of medical malpractice insurance and raised rates with the promises of even more rate increases on the horizon.
At first carriers started taking money out of their claims reserves to offset the growing legal fees and claims expenses to try to eliminate rate increase. Some decreased dividends and other unseen discretionary credits so they wouldn’t have to announce their rate increases. With most insurers of doctors and facilities in Florida now losing money on every policy they write, the only question is how much and how quickly rates will increase.
We predict that many specialties will, in the upcoming years, experience rate increases of up to 25%, some even higher. Recently in Georgia, an insurer announced that rates will immediately increase up to 45% on one specialty and 36% on another. It’s sad to say that in Florida you aren’t immune from such market changes.
My entire career has been solely dedicated to medical malpractice insurance. I’ve seen what’s to come, and I’m writing this article in hopes of preparing you for the hardening of the malpractice insurance marketplace.
In order to help you prepare for this storm, remember that it’s really important to be insured with one of the larger, financially strong insurers because many of the small insurers and risk retention groups could either stop offering coverage or merge into the larger insurers. In the last Florida hard market, we quickly went from over 50 carriers to under 5 which, when they did offer coverage, underwrote policies with very strict underwriting guidelines.
If you can, join a specialty’s or medical society’s medical malpractice insurance group purchasing program, purchasing your coverage with your peers. The best programs are professionally run with “A” rated carriers acting as partners, not just vendors. There is power in numbers and now is the time to seek such protection.
To learn more about this upcoming storm please feel free to contact Julie Danna at [email protected] or directly on her cell at 850.530.3924.