What Is Property And Casualty Insurance?

One of the insurance policies you need to consider having is the property and casualty insurance (or P&C). Many people ask, “What’s the worst that could happen,” regarding the property they own.

If you value your property and want to protect it in the event of a mishap, then property and casualty Insurance is the policy for you. Everyone deserves the peace of mind and calmness that comes with knowing that you have the appropriate insurance protections in place — even if it is for a ‘just in case’ event.

Before we go into details, let’s first understand what property and casualty insurance is.

What Entails Property And Casualty Insurance?

Property and casualty insurance is also referred to as P&C insurance. It is an umbrella term that describes different types of insurance which cover you, your personal belongings and property if they’re stolen or damaged. P&C also offers liability coverage when you are responsible for the cause of injury or damage. In addition, P&C offers car insurance coverage and professional liability insurance.

In general, P&C insurance is a combination of property insurance and casualty insurance that also caters to liability insurance coverage.

It is a perfect combination that can fit people who do not want to take different insurance packages for different items.

Property Insurance

Broadly speaking, insurers use the term ‘property insurance’ to refer to the protection of your personal belongings, such as the stuff you own. But this definition can change depending on the insurance provider or the insurance policy you hold.

Most insurers use property insurance to cover the client’s property against perils such as:

  • Theft
  • Vandalism
  • Fire
  • Weather
  • Damage, for instance, in the case of a car

There are many different types of property insurance, depending on the state and the insurance company. The most common policies that fall under property insurance, in the P&C insurance coverage, are:

  • Homeowners insurance: Protects your home and the belongings inside that you own against covered perils, such as: dangerous weather, theft, or fire. It comes with liability insurance.
  • Landlord insurance: Protects any property that generates rental income, such as the building you own from covered perils such as hail or fire. Also comes with liability protection.
  • Renters insurance: While your Landlord will have Homeowners or Landlord insurance to protect their building, you need renters insurance to cover your belongings in the rented house.
  • Car insurance: Protects you and your car in different ways, depending on the coverage that you choose. You can combine comprehensive, collision, and third party insurance coverages in your P&C insurance.
  • Condo insurance: Protects your condo against structural interior damage in addition to liability protection. You need to understand what your Condo insurance policy covers against what the condo association policy covers.
  • Specialty lines (motorcycle, RV, etc.): This is called specialized insurance policy because of the items and property it covers. You’ll get an optional physical damage coverage for the damage or loss of the property together with liability protection.
  • Professional liability insurance: Covers losses or damages to professional clients that arise from negligence.

Casualty Insurance

The casualty part of P&C insurance covers you for incidents in which you’re legally liable for injury or property damage caused to another party. It is simply liability coverage.

Casualty insurance includes personal or professional liability insurance. It covers losses to professionals or personal clients or situations arising from negligence.

The insurance company will provide coverage for liability in and out of court. When your actions are found to have been negligent, making you liable to a crash or home incident that caused damage or injury to another person’s property. In auto insurance, liability insurance is usually referred to as “Third Party” coverage.

In summary, there are many other insurance types provided under P&C insurance, including commercial and marine insurance. Property and casualty insurance helps to pay the costs and charges you’re legally responsible for, but only up to your policy’s limits.

How Does Property And Casualty Insurance Work?

Property and casualty insurance operates like other insurance policies. The insurance provider offers insurance coverage to customers for ‘covered risks’ up to a given coverage amount.

Additionally, like other insurance coverages, the premiums of property and casualty insurance are determined by risk factors specific to an individual policyholder, such as:

  • Location and neighborhood
  • Driving record
  • Likelihood to make a claim
  • Age, etc.

Customers also have the option to select the types of coverage they can include in their property and casualty Insurance policy. Additionally, most P&C insurance policies are renewable annually. But this depends on the insurance company.

This means you need to talk with your insurance agent or the insurance provider and understand what the provider is covering and up to what amount. A local insurance agent can help you determine the right P&C coverage for you.

Why Is Property And Casualty Insurance Popular among Business Owners?

Property and Casualty insurance is a popular policy for business owners. Business people already face certain critical risks – some acceptable as part of being an entrepreneur. But some risks need insurance, and the best insurance policy for this is the P&C.

The P&C insurance protects the business property in many cases such as:

  • Property loss caused by vandalism and theft
  • Property loss or damage caused by a natural disasters
  • Lost income
  • Coverage for commercial vehicles

For business owners, the P&C insurance provides coverage for the business structure and all its contents. Sometimes, P&C can cover business owners in the event of negligence. Some negligent mistakes lead to serious consequences.

For example, if a janitor ignores putting up the “Caution” sign when cleaning the floor, someone slips and is hurt, the business might be a target of a lawsuit. If the lawsuit ends up requiring the business owner to pay thousands of dollars for the injured party’s medical expenses, P&C insurance will cover negligence.

How Much Is Property And Casualty Insurance?

There is no standard price for property and casualty insurance. Several factors influence the premium costs of P&C insurance. Some of the factors that insurers can use to determining the cost of your P&C policy premiums include:

  • P&C insurance services selected
  • Number of covered perils selected
  • Costs of properties insured
  • Number of employees (for businesses)
  • Location and neighborhood
  • Driving record (if you include car insurance), etc.

Note: As a customer, you’ll only pay for your desired P&C insurance coverage. Before you buy or settle on a particular policy, you need to compare different property, and casualty insurance quotes and select the best one that meets your needs.

Bottom Line

Property and Casualty (P&C) insurance covers property or assets (such as a house, car, etc.) while also providing liability insurance for damages, injuries, or accidents for other people or their property. While purchasing P&C insurance, it is important to know what the policy covers and what it doesn’t as well as how it works. You may need to conduct a thorough review of your policy contract. Most importantly, consult with your insurance agent or the provider to better understand the policy before you commit to it.