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What You Need to Know About Property and Casualty Insurance

By September 15, 2022Insurance
property insurance

Overview

Does all the insurance terminology make your head spin? Not to worry–we’ll go through it step by step. When comparing different types of insurance coverage, you may come across some standard terms like property and casualty (P&C) insurance. These terms are used by insurers when describing their specific product line.

Understanding what property and casualty insurance coverage entail helps you make educated choices. Knowledge is power, after all!

Defining Property and Casualty Insurance

Let’s go back to basics. Property and casualty is the umbrella term for the insurance categories that protect your possessions. A property and casualty policy covers losses from fires, earthquakes, hurricanes, theft, vandalism, etc. Let’s talk about what property and casualty insurance means as a whole.

The property portion covers your personal belongings. It covers damage to your property, like your home, car, furniture, or your limited edition Star Trek DVDs.The coverage is in place whether your items were damaged or stolen. 

Casualty insurance is mainly liability coverage that protects against any losses caused by damage or injury. For example, if a friend trips down your stairs (told you to move that rug somewhere else!) and breaks their leg, your liability coverage would pay if your negligence caused the accident. You can also find coverage for medical payments as part of the casualty portion of P&C.

These definitions just scratch the surface, so it’s essential to look at your specific property and casualty insurance to see how you and your possessions are protected. 

What are the Types of Property and Casualty Insurance?

Great news! Most insurance policies offer coverage for both personal property and liability claims.

Auto Insurance

Property

Your beloved set of four wheels gets you from Point A to Point B…unfortunately, sometimes there are accidents along the way. Property coverage pays for any damage to your vehicle caused by vehicle accidents. In addition to covering accidental losses, insurance covers certain types of losses related to natural disasters like fire, windstorms, hail storms (basically, everything we thought was going to happen all at once in 2012). It may be necessary to file an additional claim. 

Comprehensive coverage pays for repairs if your vehicle gets damaged by something like windstorms, lightning strikes, etc. If Doc Brown had comprehensive coverage, any lightning strike damage would be covered and he could travel back to the future worry-free. On the other hand, collision insurance covers any accidents caused by another driver’s negligence (such as hitting you) or hitting a stationary object.

Casualty

Ok…buckle up… it’s gonna get squirrely for a bit. In Auto Liability there’s 1st party and 3rd party exposures.  A first-party insurance claim is a claim you make directly against your own insurance  You access your own policy coverages.  A third-party insurance claim occurs when you submit a claim to someone else’s insurance provider. The third-party definition is going outside of your insurance provider when seeking compensation.

In most cases, if you cause an accident, you’ll be required to pay out any injuries sustained by another person involved in the crash (i.e. Doc Brown would need to pay up if Marty got injured during one of their adventures – but only if it occurred in the Delorean). 

Homeowners Insurance

If walls could talk, they’d say…protect us, please! Homeowners’ insurance policies can do just that. They usually include two different types of coverage: dwelling coverage and contents coverage.

Think of dwelling coverage as brick-and-mortar protection, and contents coverage protects the physical possessions inside your home (Kevin can’t always be there to fight off the bumbling thieves, after all).

What does this mean? Personal liability covers bodily injury caused by an accident involving your home. Medical payments cover expenses for injuries sustained at your place of residence if someone else’s negligence causes them. It CAN cover both at-home and non-at-home situations. 

Condo Insurance

The P&C of condo insurance covers both your personal belongings and the interior of your property. Check with your condo association for policies regarding the exterior of your condo. Condo insurance usually covers property damage (such as broken windows) and personal injuries–and let’s not forget coverage for the Condo Association’s usually sizable Building deductible. 

Renters Insurance

Like condo insurance, renter’s insurance covers liability within your rental property and your possessions. If there’s damage done to your property by a third party (we all know how family Thanksgiving dinners can get a little out of control).

Special Insurance

You know that boat that sits in your garage that you’ve been meaning to go out on? You can get insurance for that too! You can also get insurance that provides liability coverage for notable items like RVs or boats…even motorcycles or eBikes. You can add optional insurance for physical damage to these items.

Landlord Insurance

In a perfect world, all tenants would be quiet, clean, and bake cookies every time you come to pick up rent. However, it’s best to prepare for less-than-ideal conditions. If you rent out any residential or commercial property, you may want to consider buying landlord insurance for your rentals. The property coverage covers any damage to the buildings. Liability coverage covers damages caused by an insured party. Renter’s insurance covers damage caused by tenants. 

What Does Property and Casualty Insurance Exclude? 

Lots o’ stuff–and usually for good reason!

For example, P&C insurance doesn’t cover normal deterioration–maintenance is on your shoulders, after all. You have to think in terms of sudden and accidental. That 34-year-old roof that wears out from normal breakdown and exposure ain’t covered; hate to break it to you.

Understanding what your insurance doesn’t include is equally important To determine whether there are any gaps in your insurance plan, you’ll want to (ahem) thoroughly review your policies. 

Or better yet…leave it to us.

Takeaways

In summary, these are some key takeaways:

  1. Your property and casualty insurance covers all kinds of losses, including those caused by theft, fire, water damage, and more.
  2. Personal property insurance covers your belongings.
  3. Liability insurance protects you if you injure someone else due to your negligent actions and provides for that defense attorney!
  4. Auto insurance covers damage to vehicles caused by accidents…and more.
  5. Homeowners insurance covers your house and your belongings inside it…and more..
  6. Renters insurance covers your belongings while living in a rented space. 

Conclusion

This stuff is much more technical than we humorously attempted (failed miserably?) to explain the most basic concepts.

When shopping around, please keep in mind that policies are contracts and each insurance company’s contracts are different. There are lots of definitions, terms & conditions valuations clauses, .restrictions, and warranties to wade through. Don’t try this at home kids…leave it to the professionals! We’re here to help; reach out now!