For more than 20 years, Florida’s Office of Insurance Regulation has put out an annual report on the condition of the medical malpractice insurance market that provides an inside look at insurers regarding strength, claims responses and more. The October 2020 report, which focuses on the top 20 medical malpractice companies in the state, is especially useful when trying to find out which insurance carriers litigate claims versus how many close their cases with payments.
State Report Gives Doctors Good Idea of Which Insurers Settle or Fight Malpractice Claims
“What we find most useful is the closed claims data chart, which lets us understand each company’s claims philosophy,” said Matt Gracey, CEO and medical malpractice insurance specialist at Danna-Gracey, the largest independent medical malpractice insurance agency in Florida. “Are they going to fight a claim that’s defensible, or settle everything they can to avoid a big shock loss?
“Some insurers take the position that it’s a lot better to settle cases because the doctor and the insurance company aren’t exposed if they can get the doctor out for limits of liability or less,” he continued, adding that claims totaling more than $10 million are becoming more frequent. “Others believe in fighting anything that’s defensible, which is what most doctors want so as not to blemish or ruin their reputations.”
In addition to highlighting an insurer’s philosophy, the data also reflects a company’s confidence in its in-house claims managers, who decide which claims to settle and which to push back on, and the outside attorneys they hire. “There’s an art to claims management, and these numbers reflect the level of confidence and experience a company has in its staff,” said Gracey.
The 2020 report is an interesting mix, with some companies settling numerous cases and others holding the line. The top two medical malpractice insurers in Florida, The Doctors Company and MedPro, for example, settled 58.4 percent and 40.1 percent of their claims with payments; whereas ProAssurance settled 81.5 percent, MedMal Direct settled 88.6 percent, and Physicians Insurance Company settled 93 percent with payments.
The report also reflects a fairly recent change by the Florida Legislature to a longstanding law that restricted insurance companies from offering malpractice insurance that allowed doctors to choose whether to consent to a settlement.
“Before, if a doctor was sued and wanted to settle, the insurance companies could still decide to fight the suit. The doctor wasn’t allowed by law to have any voice in the decision,” said Gracey. “Now, if an insurance company wants to give a doctor a say in settling, they can.”
Some insurance companies have given doctors 100 percent rights to consent to any settlement, while others have given them limited rights of consent.
“This becomes very important when a doctor is deciding what insurance company to go with to handle their malpractice insurance,” said Gracey, giving the example of MedPro, which has a 40.1 percent settlement rate. “In addition to having some skilled claims people and a fight-anything-defensible philosophy, MedPro also has a clause in their insurance policies that gives doctors a 100 percent right to tell them whether to settle or not. As a result, they have one of the lowest ratios, because doctors really don’t want to settle defensible cases.”
According to Gracey, it can be problematic when an insurance company gets the reputation for settling cases.
“Word gets around in the plaintiff attorney world, and they hunt for cases against companies who settle anything that comes at them,” he said. “Plaintiff’s attorneys don’t want to go to court; they’d much rather settle than litigate. When they find insurance companies with the same philosophy, it’s like blood in shark-infested waters.
“Most doctors want an insurance company that will defend them against frivolous or meritless cases,” he added. “While there are a lot of factors to consider when choosing a medical malpractice insurer, from price to size to financial strength, it’s extremely important that doctors also look at whether a company will fight for them when they feel they’ve done nothing wrong.”