Like many industries, the insurance industry is cyclical in nature. Each cycle lasts from two to ten years and is defined as either “hard” or “soft”. Hard markets can result from many reasons, but reflect the fact that insurance companies are losing profitability. They are characterized by high premiums, strict underwriting, lower carrier capacity, and reduced competition among companies. Soft markets, on the other hand, mean that insurance carriers are returning to profitability. They are characterized by lower premiums, broader coverage, less strict underwriting, greater carrier capacity, and enhanced competition.
The dental malpractice insurance market has been “soft” for the past several years. In fact, the soft market has lasted longer and been deeper than most professionals anticipated.
Having said that, it appears that dental malpractice insurance rate decreases have leveled out. There is still capacity, and carriers are still willing to give discounts to lure quality business to the company. Additionally, there are companies now entering the Florida marketplace for the first time, often with aggressive pricing. (You need to be careful, though, as often new companies are not experienced at claims handling for dentists. A poorly defended claim can end up as a chargeable offense against your record, driving you further to an inferior company as a means to reduce premium.)
We have also seen insurers tightening up on underwriting, especially as dentists, pressed by the economic downturn, take on riskier procedures formerly sent out to specialists. Insurance carriers are examining a risk more closely, looking at claims history and procedures performed. Some are non-renewing risks for poor payment history. Society affiliations are important, as they offer another degree of comfort for the underwriter.
An insurance agent that specializes in dental malpractice insurance, we can shop your policy among a stable of quality insurers.