What Is Property and Casualty Insurance?

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Damage to house (Photo: @maginnis via Twenty20)
As a homeowner, it’s very important to understand the insurance coverage options available to you so you can effectively select a plan that meets your needs and desired price point. While you’re probably already familiar with homeowners, renters, and auto insurance options, they all fall under the category of property insurance and typically feature property and casualty clauses that influence your reimbursement in case of an emergency or unavoidable event.
Here’s what you should know about property and casualty insurance, what it covers, and how to know if you should purchase additional coverage.

What is property and casualty insurance?

Property and casualty insurance (often referred to as P&C insurance) covers any damage that happens to your personal property, belongings, or other people within the confines of your coverage plan. An umbrella term for many different types of insurance, property and casualty insurance is an integral component to many popular insurance policies, such as those included in homeowners, renters, and auto insurance plans.
If that sounds confusing, think of it like this: P&C insurance is a form of property insurance that can help pay for whatever costs you are legally responsible for in the event of an emergency, so long as it is within the confines of your coverage plan and policy limit.

What does property and casualty insurance cover?

A simple way to understand this complex term is to break it down into its two components. Property insurance refers to the coverage of any damage done to your personal belongings, such as your home or car. Casualty insurance includes liability coverage, negligence, and any third-party losses. Here is a more comprehensive coverage list for each policy component:
Property
  • Loss or damage to belongings
  • Loss of income
  • Extra expenses paid due to items in need of repair/replacement
  • Unavoidable damage due to natural disasters
  • Crime (including theft and vandalism)
  • Damage incurred to items such as:
  • House/dwelling
  • Car
  • Personal belongings
  • Commercial property
Casualty
Liability losses: If you are found legally responsible for an accident, this insurance feature covers any fees you must pay to affected individuals, such as repair/replacement costs, legal fees, and even medical bills. This insurance policy also covers damages due to:
  • Negligence
  • Third-party losses

Do you need a P&C policy?

A key component to many insurance plans, property and casualty insurance is typically already built into your basic property insurance policy when purchasing a home or condo. Before shopping for insurance, be sure to look into your existing insurance plan(s) and examine your coverage for any gaps that you would like reinforced with insurance add-ons. Homeowners insurance is required by many mortgage lenders, so if you’ve already purchased your home, you likely already have property and casualty insurance.