Insurance for Physicians: How to Protect your Assets with Better Insurance

Safeguarding your career with malpractice insurance is vital in the medical profession, but it’s specific in its scope and only covers professional liability. Health and Life insurance, meanwhile, provide necessary protections for your family, and yourself - but only cover medical claims and/or protect your income.

Other types of insurance you need

The more assets you gain, the greater your personal liability risk. Assets such as your home, investment properties, savings, investments, and vehicles can all contribute to your wealth but also carry specific risks - and choosing the right insurance products and coverages can be a powerful tool in your financial arsenal. 

Car insurance 

You’re required to buy car insurance in most states, so it’s a no-brainer to make sure you’re insured if you drive a car. But if you buy the minimum liability limits in most states - you’re not driving with enough protection.

Even the states with the highest requirements for car insurance, Maine and Alaska, only require that drivers carry $50,000 in Bodily Injury per person/$100,000 in Bodily Injury per accident, and $25,000 in Property Damage liability. In some states, minimums go even lower: $15,000/$30,000/$5,000 (CA), and only $10,000 in Property Damage (FL). 

Why should car insurance matter to physicians? 

Liability insurance, the part of your car insurance policy that includes Bodily Injury and Property Damage, protects your assets in the event of a major crash. If someone is hurt or killed, and you’re at-fault, liability is the part of your insurance that goes toward the other drivers, passengers, or pedestrians. Carrying a minimum policy, or just a policy without enough coverage, risks your assets because you’re responsible for costs that go above and beyond your limits. If you or any of the drivers in your household are sued to cover the costs of a death, major injury, or even excess property damage - you could be ordered to liquidate assets or even have your wage garnished to pay off that debt. 

How do I buy better car insurance? 

Here are a few easy tips to make sure you’re protected on the road. 

1. Raise your limits so you’re protected for an amount closer to your net worth - most insurance policies max out at $500,000 per accident, although a few will provide up to $1 million in coverage. 
2. Add all drivers in your household, even if it can temporarily raise your rates. Young drivers, especially teens, are notorious for raising car insurance prices - but if they’re driving your vehicles they need to be covered under your policy. 
3. Don’t let your policy lapse. Many insurers consider how long you’ve had continuous insurance when deciding if they’ll insure you, or how much they’ll charge. If you’re moving or getting a too-high car insurance renewal, keep your old insurance and only cancel your first policy once your new policy is in place. 
4. If your net worth is over $500,000 - consider umbrella insurance. 

Property Insurance 

Property insurance includes policies that cover homes you rent (renters insurance), own and live in (condo and homeowners insurance), or own and rent out (landlord insurance). While you’re not always required to buy property insurance, it’s an important way to protect the assets in your home (your personal property), the home itself, and to protect you and your household members against lawsuits.   

Why should property insurance matter to physicians? 

Most people can’t afford to fully replace all of their belongings at once or completely rebuild their home if it’s destroyed by a natural disaster. If you’re a resident or in the early stages of your career, it can be especially detrimental to your savings if you’re forced to pay out of pocket for large-scale expenses like these before you’ve established a nest egg. 

As your net worth increases, however, property insurance can be especially important for providing additional personal liability protection. Whether you’re renting or own multiple homes, the personal liability coverage you get through property insurance protects you and your household members if someone slips and falls on your property, if a pet injures someone, if a part of your home breaks off and hurts someone - and even if you or a household member cause an accidental injury when you’re outside of your home (throwing around a football in the park). 

How do I protect myself with property insurance? 

1. Make sure you’re buying property insurance, even when it’s not required! If you have a mortgage on any property, you’re likely to need property insurance, but renting or paying off your mortgage aren’t good reasons to ignore property coverage 
2. Get as much Personal Liability coverage as you can. Luckily, Personal Liability coverage is often one of the most affordable parts of your policy - don’t skimp on this coverage just to save a few dollars. 
3. Make sure you get the right policies for your risk - you can’t insure a condo you own with a renters policy or an investment rental property with a homeowners policy. Make sure you talk with a licensed insurance broker - like Coverage Cat - before buying a new policy if you’re not sure what you need. Policies can vary significantly in pricing, but buying the wrong type of policy or providing the wrong information will end in denied claims when you need your coverage! 

Personal Umbrella Insurance 

Umbrella insurance is an extra layer of liability protection that extends beyond the limits of your existing policies. When you’re in a crash, if your property damage limit isn’t enough to cover the other driver's expensive antique car - umbrella insurance steps in. If someone gets injured on your property and their medical costs and lost income go above your personal liability coverage - umbrella insurance steps in. Despite providing millions more in coverage, umbrella policies also typically cost only a few hundred dollars a year - making them a versatile and cost-effective addition to a physician's risk management strategy.

Why do physicians need umbrella insurance? 

 According to a 2021 Medscape report, 56% of physicians reported a net worth of $1 million or more in 2020. Most auto and property insurance, however, max out at $500,000 in personal liability protection. Finding insurance carriers that offer even $1 million in coverage is difficult. Personal umbrella insurance policies, however, start at $1 million in coverage, significantly increasing your protection if you have a high net worth.

The White Coat Investor, also emphasizes the significance of umbrella insurance in securing a doctor's financial future. According to the expert advice shared on their platform, umbrella insurance offers peace of mind with an extra layer of defense, just like other integral insurance policies. 

What does umbrella insurance protect against?

Umbrella insurance typically protects against claims of bodily injury, property damage, and personal liability situations that exceed the limits of your primary insurance policies. While it doesn’t cover everything, it extends protection on policies like your homeowners, renters, landlord, condo, auto, boat, and even motorcycle policies.

Does umbrella insurance cover medical malpractice?  

Umbrella insurance typically does not cover professional liabilities such as medical malpractice. 

How do I buy umbrella insurance? 

Many well-known insurance companies (Geico, Progressive, Travelers, AAA) offer umbrella insurance among their products. Unfortunately most companies only allow you to buy umbrella insurance as an add-on product. This comes with some benefits, like getting a bigger bundling discount if you buy multiple policies, but also means that it can be difficult to comparison shop for umbrella insurance and you could be tied to your insurance company - even if their prices get higher. If you live in CA, FL, NY, TX, or WA, there’s an easier way to shop - use Coverage Cat to get fast online quotes for umbrella insurance and compare your prices easily!  

When should I buy umbrella insurance? 

Consider purchasing umbrella insurance when you have assets to protect or when you are at risk of being sued for significant amounts that exceed the liability limits of your primary insurance policies. For most physicians, that’s when your net worth exceeds the amount you can typically purchase from your standard auto and home insurance ($500,000). Physicians may find umbrella insurance particularly beneficial because they are more likely to have wealth and assets to protect from potential lawsuits.

What does umbrella insurance cost? 

The cost of umbrella insurance can vary depending on factors such as the amount of coverage you need, your risk profile, your insurance company, and any additional coverage options you choose. The annual premium typically ranges from a few hundred to a few thousand dollars, but this can vary significantly based on your individual circumstances.