I was living in Panama City, Florida when Hurricane Michael all but destroyed our community. As we all remember, the storm hit the Panhandle so quickly that we barely had time to prepare.
This experience made me reflect back to the medical malpractice insurance crisis that hit Florida back in the late 1990s and early 2000s. It was harsh and destructive. I remember attending 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. Carriers had either pulled out of Florida or made it very 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 hit as quickly as Hurricane Michael – will the healthcare providers and facilities be prepared?
In 2003, the Legislature put caps on noneconomic damage awards for medical malpractice cases. The caps were overturned by the court in 2014 and 2017. 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 and some have already pulled out of medical malpractice insurance and/or taking rate with the promises of more rate increases on the horizon.
At first, carriers began taking money out of their claims reserves to offset the growing legal fees and claims expenses in order to try and eliminate the 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 are now losing money on every policy they write, the only question is how much will rates increase and how quickly.
We predict that many specialties will, in the upcoming years, experience rate increases of up to twenty-five percent, some even higher. Recently in Georgia, an insurer announced that rates will immediately increase up to forty-five percent on one specialty and thirty-six percent on another. It’s sad to say that in Florida you aren’t immune from such market changes.
It’s really important to understand that many of the small insurers and Risk Retention Groups could either stop offering coverage or merge into the larger insurers. The last Florida hard market quickly went from over fifty carriers to under five who when they did offer coverage, underwrote policies with very strict underwriting guidelines.
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 to prepare you for the hardening of the malpractice insurance marketplace. Now more than ever, I can’t express the importance of moving your coverage into the Emerald Coast Medical Association’s Medical Malpractice Insurance Group Program and safely purchasing coverage with your peers.
Doctors in this program are insured with Medical Protective (MedPro Group, A Berkshire Hathaway Company). Established in 1899, MedPro is the oldest, most highly rated and financially stable insurance carrier in the market (A++ Superior by A.M. Best).
There is power in numbers – this time we can prepare for the storm before it hits.
For more information please contact Michelle Flatt, Executive Director of the Emerald Coast Medical Association at (850) 784-2090 or Julie Danna of Danna-Gracey, the program facilitator, at (850) 530-3924.