How to read a malpractice insurance quote (and know if it's in market)

A malpractice quote is easy to misread, because the single number on the front page means nothing on its own. Two quotes for the same physician can differ by half and both be correct, if one is a first-year rate and the other mature, or one is for higher limits. Before you can tell whether your number is in market, you have to know what you are looking at. Here is how to read the quote, line by line, and how to compare it to the filed benchmark for your state and specialty.

Every rate figure here comes from carrier rate filings on record with state insurance departments (SERFF and state DOIs), on a $1M/$3M mature claims-made basis. These are filed rates, not estimates.

The parts of a quote worth reading

Four fields decide what the premium means. Find them before you look at the total.

• Limits — The coverage ceiling, written as per-claim over aggregate, like $1M/$3M. That means up to $1 million per claim and $3 million for the policy year. Higher limits cost more, so a cheaper quote at lower limits is not really cheaper.
• Basis — Claims-made or occurrence, and if claims-made, the maturity year. A first-year claims-made rate is a fraction of the mature rate and will climb; an occurrence rate sits above a mature claims-made rate. This is the field most often misread.
• Territory — Your rating territory within the state. Many states are rated by county or region, and a metro territory with a heavy claims history can be filed well above the state median while a rural one sits below it.
• Credits and debits — Adjustments off the manual rate for claims history, part-time status, new-to-practice status, risk-management course completion, and more. The quote you receive is the manual rate moved up or down by these. The benchmark is the manual rate before them.

Why limits and basis have to match before you compare

You cannot compare two premiums, or compare your quote to a benchmark, unless the limits and basis line up. This is the step people skip.

Put both numbers on the same footing first. Confirm the limits match ($1M/$3M against $1M/$3M). Confirm the basis matches: a mature claims-made quote compares to our mature claims-made benchmark directly, a first-year quote does not until you account for the ramp, and an occurrence quote will read somewhat high against a claims-made benchmark by design. Only once limits and basis agree does the comparison mean anything. Mismatch either one and you will draw the wrong conclusion, usually that a quote is a great deal when it is simply an early or lower-limit number.

Comparing your quote to the filed benchmark

Once the footing matches, the comparison is quick. Find your state and specialty in the benchmark and look at the filed range, not just the single median. Where carrier depth allows, the benchmark shows the middle of the market and the spread around it.

Take OB/GYN in New York, a cell with three filed carriers (AHPIA, EmPRO, and MLMIC). The filed figures run like this on the mature claims-made basis:

Read your quote against that band. A mature $1M/$3M quote landing between about $57,700 and $72,000 sits inside the filed middle of this market: in market. A quote at, say, $84,000 sits above the filed range entirely, which does not make it wrong, but it is a number worth asking about. The benchmark tells you where you stand relative to what carriers have filed. It does not, and cannot, tell you your quote is unfair, because it cannot see the specifics of your practice.

What moves your number off the median

Several legitimate things put a physician above or below the filed median, and none of them mean anyone did anything wrong.

Territory is often the biggest. A high-claims metro county can carry a filed rate well above the state median before any personal factors apply. Claims history moves it next: open or paid claims raise the debit, a clean record earns credits. Part-time or reduced-hours practice lowers it. New-to-practice and residency-to-practice programs discount the early years. Higher limits than $1M/$3M raise it. Any of these can put your correct, fair quote meaningfully off the median, which is exactly why the benchmark is a yardstick and not a verdict.

A high number is not proof of a bad quote, but it is a reason to test the market.

If it looks high, a broker can shop it

If your quote lines up with the filed range for your state and specialty, you have your answer: it is in market, and you can sign with confidence. If it sits well above the range even after you have matched limits and basis and accounted for territory and history, that is the situation worth a second opinion.

A broker who works your specialty and state can see which carriers are competing for your risk right now, apply the credits you qualify for, and come back with alternatives. That is the part you cannot do from a benchmark alone. The filed data gives you the number to walk in with and the confidence to ask the question; a broker does the shopping. Start from the filed benchmark for your state and specialty, then let a broker take it to market.

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Common questions

How do I know if my malpractice quote is fair?

Match the limits and basis to the filed benchmark for your state and specialty, then see where your quote lands against the filed range. Inside the middle of the range is in market. Above it is worth asking about, though territory, claims history, and limits can legitimately move you off the median. The benchmark is a yardstick, not a verdict.

Why is my quote higher than the benchmark median?

Common reasons: your rating territory within the state, your claims history, higher limits than $1M/$3M, or a first-year-versus-mature or occurrence-versus-claims-made mismatch. Confirm the basis matches before concluding anything.

What limits should I compare on?

Put both numbers on the same limits. Our benchmark uses $1M/$3M, the most common physician limit, so a $1M/$3M mature claims-made quote compares directly.

Sources and method

• Source — Carrier rate filings on record with state insurance departments (SERFF and state DOIs)
• Basis — $1M/$3M limits, mature claims-made, manual (pre-credit) rate
• Worked cell — OB/GYN in New York, a three-carrier cell (AHPIA, EmPRO, MLMIC): low $50,417, p25 $57,684, median $64,952, p75 $71,968, high $78,984
• Depth — Percentile spreads are most meaningful in cells with three or more filed carriers; thinner cells show a median with less spread behind it, and depth is flagged throughout the benchmark
• Your figures — The marker runs in your browser. Nothing you type is sent anywhere or stored
• Scope — This compares a quote to filed data as a yardstick and is not a determination that any specific quote is fair or unfair

How we build the filed-rate benchmark

Disclaimer

This article is a market-data benchmarking resource derived from carrier rate filings on record with state insurance departments. It reports filed manual rates for comparison and education, and offers the benchmark as a yardstick only. It does not provide, and must not be relied upon as, insurance advice, a coverage recommendation, or a determination that any specific quote is fair or unfair. Healthcare DealHub reports filed data and can refer you to a licensed broker; it does not sell insurance. Your coverage decision is yours to make, with a licensed broker or advisor.