You Need Malpractice Insurance

Renee has been a registered nurse for 17 years. She hasn't had malpractice insurance since 2008. Would it be better to get the insurance in place again to prevent someone going after her personally?

QUESTION: Renee in Pennsylvania has been a registered nurse for 17 years. For 13 years, she’s been working obstetrics. She hasn’t had malpractice insurance since 2008 after attending a conference advising against it. Would it be better to get the insurance back in place again to prevent someone going after her personally?

ANSWER: Yes. They’re assuming that you’re broke in that seminar . But if you’re not broke, you have a target on your butt. But if you buy insurance, you put a target on your butt, so you lose either way.

I carry a $10 million liability umbrella on my homeowners and car insurance. I recommend for people who have a reasonable about of wealth to carry a $1 million liability umbrella—if you’ve got $500,000 or $1 million of wealth or more. I carry $10 million. Is that because I’m so rich? No, it’s because if I bump into somebody with my car, I go, “Are you okay?” They say, “Yeah, yeah. What’s your name?” “Dave Ramsey.” “Ohhhhhhh!” Right? It’s like a target. I’m sorry, there are just some people out there in this world who think that’s an okay way to act and they do that. I have to be prepared for that. That’s why I do that.

I think in your case, you’re starting to build some wealth. In order to protect that wealth, you already have a target because of that wealth, and in order to protect that wealth, you’re going to have to put another target on you. I’m sorry, but that is the world you live in in the medical world. Medical malpractice is part of the problem with health care costs. It’s one of the things driving them up. I think the seminar was probably giving reasonable advice for most people, but most people are broke.