
The periodic premium spikes experienced in the past were unrelated to any alleged “malpractice crisis” but rather to changes in the economic cycle of malpractice insurers and decreases in the insurance companies’ investment portfolios. When the insurance companies suffer investment losses during they attempt to make up the loss in profit by increasing rates on their insured physicians.
This holds true even in states like Texas that have passed stringent caps on the recovery of damages by victims of medical negligence. In fact, states without limits on the recovery of damages experienced a greater decline in premiums (29%) than those that did pass limits on victims’ rights (22%).
These damage caps serve only to increase the profits of insurance industry while trampling on the constitutional rights of everyday citizens.