Property and casualty insurance describes products that cover losses stemming from your possessions or injuries and damage you cause to others
Property and casualty insurance, or P&C insurance, is a broad term that actually describes coverage that protects you against two types of financial losses: those that can occur when your property is damaged and those that occur when you cause harm to someone else.
While property and casualty insurance is often packaged together, there are important differences to be aware of. Each of these types of coverage protects against very different kinds of risk:
Property insurance describes coverage that protects your stuff, such as your car or home.
Casualty insurance covers your legal responsibility in situations where someone else suffers property damage or physical injuries.
Some property insurance policies also have a liability section that covers casualty claims, or claims dealing your responsibility for another party’s injuries or damages. Homeowners insurance is a good example of this. It includes several property coverage sections, such as dwelling, other structures, and even personal property. But it also has personal liability coverage. This is why property and casualty insurance is often treated as one line of insurance.
The way property insurance coverage works is pretty simple. You buy a policy to cover something you own and pay a premium. In exchange for your premium, the insurance company promises to help you recover if something happens to the thing you insured by paying for the damage when it’s covered by the policy terms.
For example, if your home’s damaged by a peril covered by your homeowners insurance, then your insurance company pays for loss so you can repair damage. Most of the time, you have a deductible (i.e., your portion of the claim) to pay, but the rest comes from your insurance company up to the coverage limits.
Some common types of property insurance include:
Commercial property insurance.
Casualty insurance covers your responsibility if you harm someone else, either by causing them actual bodily injury or by damaging their possessions. That harm may result in a financial loss for the person you injured, and they may have a right to seek compensation from you. If that happens, your casualty insurance helps you cover the cost.
For example, let’s assume your daughter kicks a soccer ball through your neighbor’s plate glass window, and you end up being legally responsible for the repairs. The casualty, or liability, portion of your homeowners insurance most likely covers the claim. Generally, there is no deductible on liability claims.
Property and casualty insurance covers many risks that can be grouped together in a few categories:
Damage to your own property. If your house is damaged by severe weather or other covered perils, insurance can help pay for repairs.
Damage to personal property. If you have personal property that’s damaged in a house – for example, as the result of a fire – insurance usually helps repair or replace that property.
Damage to someone else’s property. If you do something that results in damage to someone else’s property (such as cutting down a tree that lands on your neighbor’s house), insurance may help pay for the damage.
Your liability for someone else’s injuries. If someone slips, falls, and gets hurt on your property, insurance can help pay for medical expenses and stave off a lawsuit.
Figuring out how much property and casualty insurance you need to cover your home isn’t necessarily easy, but it is something you can tackle on your own. (We even have a guide to walk you through the basics!)
Start by determining what it would cost to replace your home in a total loss. Anything less than its replacement cost, and you risk coming up short during claim. Other property coverages are usually a percentage of your dwelling coverage. As for personal liability, we typically recommend homeowners have at least $100,000 in coverage, but that may go up depending on your situation. Last is your medical payments coverage, which is usually around $1,000.
Still have questions? Contact us and one of our insurance representatives will be happy to help.
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