Published: April 15, 2022Updated: July 13, 2022

What Is Property and Casualty Insurance?

Property and casualty insurance covers both your property and liabilities.

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If you have ever been in the market for home insurance, business insurance, or auto insurance, you may have heard the term “property and casualty insurance.” Insurance terminology can be difficult to decipher, so having a term that spans multiple markets makes it simpler. No matter which insurance market you are in, property and casualty insurance covers your assets and belongings as well as your liabilities.

What Is Property and Casualty Insurance?

Property and casualty (P&C) insurance, an umbrella term for insurance coverage, is a form of bundled insurance that covers both your property and your liabilities. Even though property coverage and casualty insurance cover separate assets, P&C insurance is the minimum in many states. Learn more about each type of insurance and which losses and financial protections it covers:

  • Property insurance: Property coverage covers your assets and belongings, such as your house, car, clothing, furniture, electronics, and valuables. Your personal property coverage will pay to repair or replace items in the event of property damage.
  • Casualty insurance: Casualty coverage reimburses you if you are found legally responsible for someone’s injuries or damage to their belongings. For example, If you cause a car accident, your car insurance liability coverage will help you pay for the other driver’s expenses.

TIP

Make sure to check the minimum insurance requirements for your state. Some states require more than P&C insurance.

What Does P&C Insurance Cover?

P&C insurance typically contains two primary types of coverage: liability coverage and protection coverage. In short, protection covers your property and liability covers others’ property and injuries.1

Types of P&C Insurance

P&C insurance covers protection and liability in many different markets.

  • Auto insurance: P&C insurance is the minimum vehicle coverage in almost every state. In auto insurance terms, property insurance is called property damage liability, and casualty insurance is called bodily injury liability. P&C covers damage to your vehicle after an accident as well as the other person’s medical bills and property damage if you are at fault. P&C also covers replacement of your vehicle in the event of car theft.
  • Homeowners insurance: In the case of home insurance, property covers personal items inside the home as well as the home’s structure. Casualty covers the cost of medical expenses or legal fees if a guest is injured on your property and you are found to be responsible.
  • Condo insurance: Condo insurance is similar to home insurance, as it covers personal items as well as the liability of others. This insurance also covers damage to your condo unit, but not damage to the building itself. The condo association’s master policy covers damage to the building. The master policy does not cover the interior walls and improvements to the condo. Instead, your personal condo insurance will cover those things.
  • Renters insurance: Renters insurance covers your personal property and liabilities. If your personal property is damaged, you will be reimbursed for what you lost. Renters insurance also covers legal costs if you accidentally damage someone’s property and they decide to sue you. Renters insurance doesn’t cover damage to the exterior or interior of the building, much like condo insurance.
  • Landlord insurance: The property portion of landlord insurance covers the building itself. The casualty portion covers your liabilities if a tenant gets injured on the property and it’s your fault.
  • Business insurance: Business insurance provides coverage for damages and losses to the business property and assets. Casualty coverage protects against claims from people injured on the premises. These policies also cover damages that company products or services cause that occur away from business facilities.
  • Power sports insurance: Power sports insurance covers boats, ATVs, golf carts, and snowmobiles. The property portion covers repairs to your vehicle from damages. The casualty portion covers someone’s injuries or property damage if you cause an accident.

How Does P&C Insurance Work?

If your personal property is damaged or someone is suing you for damages, you can file a claim with your insurance company and get reimbursed for the losses. However, insurance will reimburse you only up to your policy’s property limit or casualty limit.

That is why it is important that you make sure your liability limit is appropriate for your situation.

FYI

Your coverage limits should match the worth of your belongings. For example, if you have $300,000 of belongings in your home, your coverage limit should be $300,000. If your coverage limit is less than that, you risk paying out of pocket for damages.

What Is the Difference Between Property Insurance and Casualty Insurance?

While property insurance and casualty insurance are often grouped together, they are very different from one another. Property insurance reimburses you for damages to your possessions. Casualty insurance reimburses you for legal fees or medical payments if you are found to be at fault for someone’s injuries or damage to their property.

Does P&C Insurance Cover Personal Lines?

Yes. All P&C insurance can be split into personal lines and commercial lines.

What Is the Difference Between P&C Insurance and Personal Lines?

All P&C insurance falls into one of two groups: personal lines and commercial lines.2 While both groups are a part of P&C insurance, they work in different ways.

  • Personal lines: Personal lines are for individual vehicles and household insurance. These policies protect you against different kinds of risks that could impact you financially such as damages such as fire, theft, natural disasters, death, accidents, lawsuits, and illness. In 2020, personal lines accounted for 52 percent of premiums written.
  • Commercial lines: Commercial lines help businesses keep their doors open in the event of a lawsuit. They cover damages to the physical building as well as medical costs and legal fees if an employee is injured on the job. In 2020, commercial lines accounted for 48 percent of all premiums written.3

Recap

In the world of insurance, property and casualty is not something you should gloss over. Whether you are looking into home insurance or auto insurance, this type of policy is important in terms of both your property and your liability.

Citations

  1. What Is Property And Casualty Insurance? Allstate. (2019, Sep).
    https://www.allstate.com/tr/insurance-basics/property-and-casualty-insurance.aspx

  2. Difference between Personal Lines and Commercial Lines in Insurance. Winsurtech. (2019, Jul 17).
    https://winsurtech.com/blog/difference-between-personal-lines-and-commercial-lines-in-insurance/

  3. Facts + Statistics: Commercial Lines. Insurance Information Institute. (2022).
    https://www.iii.org/fact-statistic/facts-statistics-commercial-lines