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Malpractice insurance rates are not tied to malpractice award amounts? Unless rates were fixed by law and financially guaranteed by the Government, how on eart

Malpractice insurance rates are not tied to malpractice award amounts? Unless rates were fixed by law and financially guaranteed by the Government, how on earth would that even be possible. Are you just a troll?

ubernostrum 11y ago
Malpractice awards tend to grow at a rate slightly higher than inflation. Malpractice insurance premiums, however, grow at a far higher -- sometimes double-digit -- rate, and do so even when malpractice judgments are capped by law. If the premiums were simply rising because of the amount of money given in a malpractice judgment, we would not see that. Therefore, malpractice premiums are not -- in any meaningful sense -- tied to malpractice award amounts. Typically, the gigantic spikes in premiums seen over the past couple of decades are attributed to other factors in the insurance industry, including the need to make up for investment losses and for losses from other sectors of insurance (i.e., market crashes + 9/11 were not kind to insurers).
- hardcandy 11y ago
  Do you realize that many hospitals and surgical specialties self-insure themselves? e.g. large groups of orthopods and neurosurgeons will get together and form a co-op with a few attorneys and operate as a self-insurance vehicle, because they are able to gauge risks better than others. Premiums and judgments are way more connected than you are implying.
  - ubernostrum 11y ago
    Premiums and judgments are way more connected than you are implying. There is a belief on the part of many people that massive, bank-breaking, out-of-control, $BIGNUM malpractice judgments are common and that this is the reason why premiums have skyrocketed. This belief is not borne out by the facts, which are that malpractice awards increase, on average, about 3% more than inflation, and that even in states with "here's a nickel, sorry we killed your spouse"-type caps on judgments the premiums have continued to rise far out of proportion to the amounts of the judgments.

ubernostrum 11y ago

Malpractice awards tend to grow at a rate slightly higher than inflation. Malpractice insurance premiums, however, grow at a far higher -- sometimes double-digit -- rate, and do so even when malpractice judgments are capped by law. If the premiums were simply rising because of the amount of money given in a malpractice judgment, we would not see that. Therefore, malpractice premiums are not -- in any meaningful sense -- tied to malpractice award amounts. Typically, the gigantic spikes in premiums seen over the past couple of decades are attributed to other factors in the insurance industry, including the need to make up for investment losses and for losses from other sectors of insurance (i.e., market crashes + 9/11 were not kind to insurers).

hardcandy 11y ago
Do you realize that many hospitals and surgical specialties self-insure themselves? e.g. large groups of orthopods and neurosurgeons will get together and form a co-op with a few attorneys and operate as a self-insurance vehicle, because they are able to gauge risks better than others. Premiums and judgments are way more connected than you are implying.
- ubernostrum 11y ago
  Premiums and judgments are way more connected than you are implying. There is a belief on the part of many people that massive, bank-breaking, out-of-control, $BIGNUM malpractice judgments are common and that this is the reason why premiums have skyrocketed. This belief is not borne out by the facts, which are that malpractice awards increase, on average, about 3% more than inflation, and that even in states with "here's a nickel, sorry we killed your spouse"-type caps on judgments the premiums have continued to rise far out of proportion to the amounts of the judgments.