NCPA - National Center for Policy Analysis

Jury Awards Boost Doctors' Malpractice-Insurance Costs

September 10, 2001

Malpractice coverage for doctors is already one of the most expensive kinds of insurance -- and it's going to get more expensive. Insurers began raising rates last year, after several years of price-cutting competition that left premiums trailing inflation.

Price increases are highest for obstetricians, gynecologists and surgeons -- who are most frequently sued. In New York and Florida, these doctors pay more than $100,000 a year for $1 million in coverage.

  • Some of the biggest insurers are raising rates in many states by more than 30 percent.
  • Even insurers owned by doctors and hospitals -- which strive to keep rates low -- are increasing prices by 10 percent to 18 percent.
  • A 4 percent rise in premiums last year was the largest since 1994.
  • Malpractice premiums account for about one-tenth of the 10 percent increase in health-care costs predicted for this year, experts report.

They say the primary reason for the acceleration in malpractice premiums is an increase in jury awards -- which now average $3.49 million each. That's up 79 percent since 1993.

Source: Joseph B. Treaster, "Insurers Raise Doctor's Rates at Rapid Pace," New York Times, September 10, 2001.


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