There are many facets to insurance policies that may confuse those unfamiliar, such as the deductible. If you’re having trouble understanding your malpractice insurance policy’s deductible, let us help with our brief explainer on the basics of malpractice policies and deductibles.
What Is an Insurance Deductible?
What is an insurance deductible, and why is it important to understand? Basically, the deductible on an insurance policy is the lump sum the insured must pay before the insurance carrier begins paying what the policy covers. Typically, the higher the deductible, the lower the monthly premiums, and vice versa.
Insurance Deductible Scenario: If you’re in an automotive accident and your vehicle needs repairs, you must pay the deductible before the insurance policy activates.
In medical malpractice terms, the healthcare professional must pay a set amount before the insurance carrier covers the costs of a settlement or legal fees and court costs. But, as we’ll discuss, the deductible may only be for an indemnity and not cover the legal fees of a lawsuit.
Do Malpractice Insurance Policies Feature a Deductible?
One thing that the insured should understand about their malpractice insurance policy’s deductible is that their policy may not even feature a deductible. A deductible is standard for basic home, auto, and healthcare insurance policies. But malpractice insurance is different, and many policies don’t feature a deductible.
While they’re not as common as they are for home or auto policies, some malpractice insurance policies feature a deductible. The deductible for a malpractice policy can vary wildly from $1,000 to $10,000 or higher, depending on the policy and what it covers.
What’s the Difference Between an Indemnity and Indemnity & Expense Deductible?
Those who decide on a deductible for their malpractice insurance have a choice between an indemnity-only and an indemnity and expense deductible. In an indemnity-only deductible policy, the insured must pay the deductible only if payment of indemnity must be made and the insured is forced to pay a settlement to the plaintiff.
So, if the defendant of a malpractice lawsuit has an indemnity-only deductible policy, they’d only pay the deductible if they lose the case and are forced to pay an indemnity. But an indemnity-only policy does not cover legal costs—an indemnity and expenses policy does. Those insured with such a policy pay the deductible immediately for legal fees.
We hope our guide has helped you understand malpractice insurance deductibles a little better. As a medical malpractice insurance agency, we understand every facet of malpractice insurance and are always happy to help those looking to learn more. Contact our helpful staff today if you have further questions or are interested in purchasing an insurance policy.