The Physician and the Kinds of Insurance He Should Carry

October 10, 2013

What types of insurance issues plagued physicians in 1932?

This article appeared in the first issue of Medical Economics published in October 1923.

“How much property did the doctor leave?” said Mr. Jones to Mr. Brown.

Dr. Blank, a leading physician of the community, had died very suddenly, as the Daily News said, “in the flower of manhood.”

“A house free and clear and $42,000 in life insurance,” was the reply.

“Thank heaven for life insurance,” devoutly answered Mr. Jones, “ for the interest on that will keep the widow and child going fairly comfortably.”

Such dialogues take place with tragic frequency throughout this land, but the reply of the Messrs. Brown to the Messrs. Jones are not always so reassuring.

The greater part of the ordinary man’s life is devoted to work and the resultant income in dollars and cents. Yet it is many times surprising to observe how he overlooks, avoids, or forgets to protect against loss that which he has and to obtain which he has spent untold hours.

Why should he not protect himself? Every man believes inherently in the fundamental principles of insurance, but the percentage of the country’s annual fire loss not covered by insurance is astounding. It is even more than that-it is pitiful; for, one can look behind those figures of total loss and see homes built and businesses started by self-sacrifice, scrimping and saving, only to be wiped out in a few hours, leaving the individual to start where he originally began.

The man who realizes these things protects himself and his family against the vicissitudes of uncertainty. No man can foresee fire, nor can any man foretell death. Therefore, the prudent man makes the protection of his increasing possessions his first interest; the unseeing too often purchase protection too late.

Foundations of insurance were laid years ago when certain individuals dealing largely in marine insurance combined to make secure the belongings of other individuals. Now it is possible to secure protection against practically every form of hazard. For example, life insurance is written in such a variety of forms that every man can but protection against death satisfactorily to himself. Financial loss by reason of a breakdown in health or by injuries received in accidents may be guarded against. Great artists insure their fingers; present-day pugilists have policies on their forearms and hands.

Property is protected against windstorm, hail, rain, water damage, cyclone, flood, etc. The individual can indemnify himself against suit for damages brought for any reasons by others. Landlords can be assured of their rental values and tenants can be protected against increase in rents.

How is the individual unacquainted with insurance practices to known what to do and how to do it?

Every man, for his own benefit and good, should have on his staff of experts an insurance adviser. In particular a physician whose time is so taken up with his practice and the troubles of others that business matters must needs receive but little of his attention, cannot afford to be without his insurance expert to render advice on the various matters of insurance importance.

Liability insurance

Let us look at that with which he must contend. In the first place, there is his own practice. If for some reason the patient charges malpractice and brings suit for damages, he should have a Physicians’ and Surgeons’ Liability policy which will indemnify him against a possible judgment. If a domestic servant or employee receives injury while in the course of his duties, the physician who seeks protection for his employees should have someone to advise him that the financial loss to the employee may be obviated by a Workmen’s Compensation policy.

He should know that public liability indemnifies the owner of property from suit brought by persons not in his employ and injured while on the property, the basis of recovery of damages being negligence on part of the owner. Damage suits with heavy judgments are becoming increasingly common and every owner should protect himself against such public hazards. The difference, as is readily seen, in the Workmen’s Compensation and Public Liability policies, is that the former is bought by the employer or policy holder for the protection of those in his employ, while the latter is insurance for the policy holder against the injured person.

Fire insurance to those who have not thought if it is of paramount importance. Protection against fire loss is probably the most common form of insurance. Nevertheless, it is too often disregarded. Not only should the building itself be covered for its actual replacement value, but its contents, such as furniture, instruments, clothing, books, silverware, etc., should be regarded as a separate item and taken care of accordingly. Furthermore, outlying houses, such as garages, barns, icehouses, poultry houses and the like, together with their respective contents, must be considered as separate risks. In connection with fire insurance, it is worth noting that the policy excludes loss by riot, insurrection, civil insurrection, and explosion. However, a policy covering against these risks is now obtainable and is a most worthwhile coverage.

Let us glance at the chances of loss through the elements. We have as the “twin brother” of fire insurance, Tornado and Windstorm insurance, which covers all direct loss by tornado, cyclone, or windstorm. Many things may be done to prevent loss by fire, but no such precautions avail in the case of tornadoes and windstorms. These destructive acts of nature leave man practically helpless and should most certainly be guarded against. Hail insurance, in principle at least, comes under this category, as does protection against water damage, where plumbing systems and the freezing hazard make the risk of loss a considerable one.

Burglary insurance

Burglary insurance is another form of protection often overlooked. It may be obtained in a number of different forms, and a little thought as to insurable values will result in obtaining the form best suited to the individual policy holder. In the case of a person possessing a considerable amount of jewelry, a Jewelry Floater, so-called, may be obtained, protecting each piece specifically listed against loss of any kind. Inland Transportation and Tourist Baggage policies serve to safeguard the individual’s belongings while traveling, either by land or water. A Personal Hold-up policy is also obtainable, as is a Forgery policy covering against the raising or forging of checks issued by the insured.

Automobile insurance

Automobile insurance is written to protect the car owner against the hazards of fire and theft, and against loss to his car by reason of a collision with another other car or object. Furthermore, Public Liability insurance is obtainable in limits upward of $5,000 to protect and defend the insured from suits brought by persons injured by his car. And, in limits of $1,000 and upward, protection is obtainable from suits brought by individuals for damage done by their car or property.

These five forms, know as Fore, Theft, Collision, Liability, and Property Damage, are exceedingly intricate and will receive separate treatment in a subsequent article.

Life insurance

The foregoing are the chief dangers to which the individual is subjected and against which he would do well to protect himself. But, having done this, he is omitting the most important item against which he should insure-the mechanism that has brought to him all that he has-his mental and physical powers and activities.

Life insurance is a great study, a profession in itself. It cannot be taken lightly either by the seller or the purchaser. A man cannot sell life insurance “on the side” any more than a purchaser can afford to let it go by saying, “Well, I’m going to buy a few thousand more,” and expect to have a working life insurance program.

In a great many instances the future of his family and even of himself is dependent exclusively on whether his life insurance estate has been built wisely and well. In another article an attempt will be made to point out the different phases of this great study in more detail.

In this day of thousands of automobiles, railroads, subways, aeroplanes, boats, and every conceivable form of swift transportation it behooves all men to safeguard their physical activities and all that it means with some form of accident and health insurance. In case an accident or long illness suddenly terminates the income it is all too often problematic in just what way the next payments will be made.

In a series of articles to appear in early issues of Medical Economics a more detailed study of the practices of insurance will be presented.

An exchange says the notice in the rooms of hotels which reads, “Have you left anything?” should be changed to “Have you anything left?”

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