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Property and casualty insurance

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    Article Highlights

    As you compare insurance policies, you will encounter several terms and definitions unique to the insurance world. “Property and casualty insurance” is a term you’ll see across a variety of insurance products — including policies for personal, employee or business use. 

    It’s helpful to understand what property and casualty insurance is and how it benefits you, including what this generic insurance term doesn’t cover. 

    What is property and casualty insurance?

    Property and casualty is the broad term for the insurance categories that protect the items you own. This includes liability coverage. You may also see it referred to as P&C insurance or P&C for short. Property and casualty coverage is a term that applies to variety of insurance products, including:

    • Auto 
    • Homeowners
    • Condo  
    • Renters
    • Special insurance for products such as boats, motorcycles and RVs

    Property and casualty insurance has two main coverage types: personal property and liability. Each insurance policy has its own definitions of coverage for personal property and liability.

    Think of the property portion as covering your personal belongings. This covers damage to your personal property, such as your home, furniture, cars or electronics. The coverage is in place whether your items were damaged or stolen. The casualty insurance in P&C provides coverage for any loss due to damage or injury. For instance, if your friend comes to visit and falls in your kitchen and breaks their arm, your liability coverage would pay if you were determined to be negligent for the accident. Medical payments are also part of the casualty portion of P&C, and pay without regard to negligence.

    This is a broad range of definitions, so it’s important to understand how property and casualty insurance protects you and your belongings. 

    Types of property and casualty insurance

    While property and casualty may be a blanket term used in insurance, most insurance policies cover both personal property and liability. 

    Auto insurance

    The property portion of P&C insurance covers you, your passengers and other authorized drivers of your car when you’re involved in an accident — including the damage after the crash. Beyond accidents, coverage is also offered for events such as theft, vandalism and weather damage. Collision covers damages to your car due to an accident or collision with a stationary object, while comprehensive covers your car from damage due to a natural event.

    Most states require bodily injury coverage, which provides medical payments for  claimants injured in an accident for which you’re considered at-fault. This is the casualty portion of P&C in auto insurance. Property damage liability, when you damage someone else’s property like a car or fence, also falls under casualty insurance.

    Homeowners insurance

    The property portion of P&C in homeowners insurance is broken up into two parts:

    dwelling coverage, which covers the structure of your home, and contents coverage, which covers the belongings inside your home. 

    The casualty insurance portion of a homeowners policy includes personal liability and medical payments. This covers incidents both in and away from your home. For instance, if your dog runs outside and bites your neighbor, your liability coverage may  cover the medical expenses to treat the bite. Check with your insurance provider if you have a dog, as some companies exclude certain breeds from liability coverage.

    Condo insurance

    Your personal belongings are covered under property and casualty with condo insurance, including the interior construction of your property. Your condo association should have an insurance policy that provides coverage for the exterior portion. P&C for condo insurance typically includes liability, which means if someone is hurt inside your condo, costs associated with the injury are covered by medical payments and/or liability coverage.

    Renters insurance

    Similar to condo insurance, renters insurance covers liability inside your rental and your personal belongings. Your landlord is responsible for insurance covering the structure of your rental.

    Special insurance

    Similar to auto insurance, special insurance provides liability coverage for items such as boats, motorcycles, RVs or golf carts. You can add optional coverage for physical damage to these items.

    Landlord insurance

    If you own any rental properties that produce a rental income, then you likely have landlord insurance. The property coverage for this type of policy covers damage to the buildings. The casualty insurance includes liability coverage. Renters should also carry liability insurance with their renters policies. This does not mean the property is “doubly covered” for liability. Any liability claims will be assessed by a claims representative to determine if the negligence falls with the landlord or the tenant.

    Business insurance

    If you own a business, you likely need some form of property and casualty coverage. Because of the extensive needs of businesses, there are several forms of P&C your business might benefit from, including:

    • Workers compensation – covers medical payments for employees injured on the job.
    • Businessowners policy (BOP) – includes property protection and liability coverage.
    • Commercial auto – if your company uses commercial vehicles, then you need commercial auto coverage, which includes P&C.
    • Umbrella insurance – provides additional liability coverage when you reach your limits on other insurance policies.

    What’s not part of property and casualty insurance?

    Understanding what’s not included is as equally important as knowing what property and casualty does cover. This way, you can identify any gaps in your policy and where you might need to supplement your coverage. 

    Property and casualty does not provide coverage for normal wear-and-tear or breakdown on your property. For instance, if your roof is leaking due to its age, your property coverage will not pay for a new roof.

    Health insurance and life insurance policies aren’t included in the definition of property and casualty either, since those types of policies are protecting you as a person, not as property.

    The takeaway

    • Property and casualty insurance is a broad term in the insurance world for personal property and liability coverage.
    • Auto, homeowners, condo, renters, landlord, business and specialty items all have forms of property and casualty included in the policies.
    • The property portion of P&C helps cover the replacement and repair costs due to damage of your personal property.
    • The casualty portion of P&C covers liability, which is when you’re responsible for damages to another party. This includes both physical injuries or damage to someone else’s property.

    Conclusion

    Standard property and casualty insurance policies are designed to protect you, your assets and your property in case of an incident. Accidents happen, and adequate protection is essential to managing the fallout. As you review your policies, it’s important to note what is and isn’t covered and identify potential gaps, including gaps in your property and casualty coverage.

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