Property and Casualty Insurance: How It Works and Type of Coverages

Insurance property and casualty is a type of coverage that protects both the property (home) and the owner. It is also known as P&C insurance. It is the type of insurance policy that covers different types of coverage.

The fascinating thing about P&C insurance is that it covers claims made when you are legally responsible. This includes injuries to others and damages to others’ property.

Property owners often prefer this type of insurance policy because of its extensive coverages. In this article, you are going to find out how property and casualty insurance works.

The Different Parts of Property and Casualty Insurance

The broad term in insurance property and casualty covers both properties and casualty. Below is a breakdown of these different parts:

Property Insurance

As the name suggests, this type of insurance policy covers the stuff your own, i.e., your belongings. This includes your home, electronics, and furniture.

A common scenario is when your property is vandalized. Stolen or damaged properties may also be covered by the coverage.

Casualty Insurance

This type of insurance policy is not limited to injuries to others. It also covers the damages caused to other people’s properties. You would only be required to use the coverage if you are legally responsible for the damage.

How Insurance on Property and Casualty Works

Here are some examples of how property and casualty insurance work:

Example A: Home Razed

Let’s assume that your home is burnt down by the fire. You can file a claim to get your property and casualty insurance to cover it. In most cases, policy providers only compensate you only to the maximum limit covered by your property damage.

Example B: Property Theft

Under property insurance, you may get reimbursement for your lost properties. This is because most policy providers provide coverage for both the property and its content. So, you will get reimbursement to replace the stolen items.

Example C: Casualty to Others

Whether you damaged someone’s car or caused bodily injury to the person; you must pay damages. Your property and casualty may be able to cover that if you have been consistent with paying premiums.

In the case of casualty to others, the focus is usually on property damage and bodily injury. If you damaged someone’s property (say a car), you will pay the damages. Also, if the person sustained bodily injury, you will pay.

The bodily injury claim can be judged in both ways. Scenario one is if you run into someone with your car. Scenario two can be when someone visits you and sustains bodily injury before leaving. In both cases, the injured person has the right to sue you for damages.

Types of Property and Casualty Insurance

Here are some of the common coverage options you can get with property and casualty insurance.

1.    Homeowners Insurance

This type of property and casualty insurance covers the home and its content from common perils. Examples of these perils are:

  • Thunderstorm
  • Theft
  • Fire

The coverage also extends to liabilities caused by the policyholder. In this case, the homeowners’ coverage under property and casualty will cover damage to other peoples’ properties.

2.    Vehicle Insurance

This coverage covers your car from auto accidents. It also covers payments for the replacement of the vehicle, if it is stolen.

In the case of personal liability; the driver is expected to have personal liability coverage. This comes in handy when the driver hits someone or damages someone’s car.

3.    Renters Insurance

Renters’ insurance may cover both the property owner and the renter, depending on the terms of the policy. The coverage commonly covers the property from structural damages and the owner’s personal property.

In addition, a renter’s insurance may cover replacements for stolen properties. The coverage’s limit is usually on your property coverage.

One advantage of the renter’s insurance is that it can cover additional living expenses. This happens when the property owner has to live somewhere else while the property is under repair.

Some of the living expenses covered here are:

  • Lodging/renting a property somewhere else
  • Groceries

4.    Power Sports Insurance

This type of insurance property and casualty cover damages on power sports vehicles. Examples of vehicles covered here are:

  • Golf carts
  • Boats
  • All-Terrain Vehicles (ATVs)
  • Recreational Vehicles (RVs)

The coverage also covers casualties on other’s power sports vehicles. Deductions will be made from your power sports coverage to cover the damages.

5.    Condo Insurance

This is similar to the homeowner’s insurance, but with some key differences. Although it covers damages to the structural unit of your home, it also covers replacements. The replacements are made only when your personal property is damaged too.

Condo insurance also provides coverage for damages to the surrounding areas of your condo property.

6.    Landlord Insurance

This type of property and casualty insurance covers a property that generates rental income. Coverage is extended both to liabilities and damages to the property. Certain perils like windstorms, fire, and hail are considered damage.

If someone sustains an injury on your property, the landlord insurance also covers that.

7.    Business Insurance

As the name suggests, this is the type of property and casualty insurance that protects your business. Coverage is for both the assets and property/building of the business.

Here are some of the key considerations of a business coverage under property and casualty insurance:

Third-Party Casualty

Third parties can file a lawsuit against your business if they get injured while on its premise. Damages to their properties may also be considered.

Employee Coverage

The business insurance can also cover the employees. This is generally categorized as Workers’ Compensation. This entitles your employees to compensation if they get injured while working for your company.

Conclusion: Get Insurance for Your Property and Casualties

Now that you see the importance of getting insurance on property and casualty, shop around for the best providers. Be sure to find out the type of coverage available for your property and asset before deciding on the insurance company to sign up with.

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