What Types of Property and Casualty Insurance Are There? (2024)

Key Summary

There are several common types of property and casualty insurance (and reinsurance) offerings in the property and casualty (P&C) insurance industry. They are auto insurance, homeowners insurance, renters insurance, business insurance, flood insurance, earthquake insurance, and umbrella insurance, with more coverage types evolving and growing globally each day.

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Overview of Property and Casualty Insurance Types

Below is an overview of the most common types of P&C insurance available:

1. Auto Insurance

What is Auto Insurance?

  • Provides financial protection for losses, damages, and/or injuries that may occur because of a vehicle accident.

  • Offers protection when vehicle damage is caused by other means, such as theft, fire, or natural disasters.

What Does Auto Insurance Cover?

  • Damages to a vehicle.

  • Medical expenses for a vehicle operator and any passengers injured.

  • Liability insurance coverage if the insured is found at fault in an accident.

  • Some policies may also cover damages to other people's property, such as fences or buildings, as well as towing and rental car expenses.

Coverage May Be Determined Based On:

  • The make and model of a vehicle.

  • The operator's driving record, the state they live in, and their age.

  • Additional factors, such as credit score, as this is seen as an indicator of overall risk as a policyholder.

View how a personal auto insurer uses InsuranceNow to minimize risk and better serve customers:

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2. Homeowners Insurance

What is Homeowners Insurance?

  • Protects from losses and damages to a home and personal property.

  • Some policies in North America may include condo insurance or alternative housing complex insurance, such as for cooperatives.

What is Covered by Homeowners Insurance?

  • The physical structure of a home, including the roof, walls, and foundation.

  • Personal property, such as furniture, appliances, and clothing.

  • Loss of use, which covers the cost of temporarily living elsewhere if the insured’s home is damaged and uninhabitable.

  • Liability coverage, which protects the insured against lawsuits if someone is injured on the property.

  • Generally, covered perils like fire or storm damage are included within the policy.

What is Not Covered by Homeowners Insurance?

  • Damage caused by earthquakes or floods (these typically require separate insurance policies).

  • Normal wear and tear on a home or personal property.

  • Business-related activities or equipment.

  • Damage caused by intentional acts (such as vandalism) by the homeowner.

3. Renters Insurance

What is Renters Insurance?

  • A type of household property and casualty insurance that provides coverage for individuals who rent a residence, such as an apartment or house.

What Does Renters Insurance Cover?

  • Losses and damages to personal property.

What is Not Covered by Renters Insurance?

  • Damages to the actual physical dwelling. Instead, this type of policy is presented as “landlord insurance,” which also covers liability protection in case of accidents or injuries that occur within the rental property.

4. Business Insurance

What is Business Insurance?

  • A commercial insurance offering that protects small businesses, large businesses, new businesses, and legacy businesses.

  • Prevents potential financial losses due to unexpected events such as accidents, natural disasters, or legal liabilities.

What Does Business Insurance Cover?

  • A wide range of risks depending on the specific needs of the business.

  • Often includes buildings and property such as equipment, technology, tools, and resources.

What Types of Business Insurance are Available?

  • Property insurance: Covers damage to a business's physical property, such as the building, equipment, and inventory.

  • Business liability insurance: Often used within the commercial insurance realm to describe general liability (GL) insurance. This is coverage that provides protection when claims are filed for bodily injury, property damage, personal injury, and more that can arise from business operations.

  • Liability insurance: Offers protection over legal liabilities resulting from accidents or injuries that occur on the business's property.

  • Business interruption insurance: Clarifies coverage regarding lost income and additional expenses if a business is unable to operate due to a covered event, such as a natural disaster or effects from the global pandemic.

  • Professional liability insurance: Covers liability claims resulting from professional errors or negligence.

  • Cyber liability insurance: Entails coverage regarding losses related to data breaches and cyber-attacks.

5. Flood Insurance

What is Flood Insurance?

  • A type of coverage that extends to a property or residence that is impacted by flooding, helping to protect them from financial losses.

What Does Flood Insurance Cover?

  • Property and personal belongings damaged or destroyed by floods.

  • Coverage is not generally included in standard home or business insurance and is provided in the insurance market as an extension to a policy for properties found in or near areas known to flood.

  • Certain policies cover the cost of temporary housing if the insured needs to evacuate their home or business due to flood damage.

Learn more about how insurance risk data helps insurers properly underwrite and price flood insurance.

6. Earthquake Insurance

What is Earthquake Insurance?

  • Designed to make the insured whole if losses and/or damages to property are caused by earthquakes.

  • A type of P&C insurance is specific to those who live or operate a business in earthquake impacted zones.

What Does Earthquake Insurance Cover?

  • Damages are covered by insuring “pure loss” through traditional earthquake insurance.

  • Typically, the cost of repairing or rebuilding a home or business, as well as replacing any possessions or assets that were damaged or destroyed in the earthquake.

What is Not Covered by Earthquake Insurance?

  • Damage caused by landslides, sinkholes, or other earth movements that are not directly related to an earthquake.

  • Damage caused by flooding or other natural disasters.

  • Some policies may exclude coverage for certain types of personal property, such as jewelry, artwork, or valuable collections.

*Because of the significant damage earthquakes create, developing profitable risk management solutions for earthquake insurance is difficult for insurance companies to provide in certain circumstances.

7. Umbrella Insurance

What is Umbrella Insurance?

  • Additional liability coverage above and beyond the limits of other P&C insurance policies like home, auto, or business insurance policies.

  • An extra layer of protection.

What Does Umbrella Insurance Cover?

  • Varies depending on the type of umbrella liability insurance policy requested.

  • Very specific measures are described in the policy.

  • Common policies include property, injury, or legal costs.

  • Major claims that might not be covered under normal umbrella liability insurance policies.

As an expert in the field of property and casualty insurance, I bring a wealth of knowledge and hands-on experience to provide you with comprehensive insights into the key concepts covered in the article. My background includes years of working within the insurance industry, collaborating with major players, and staying abreast of the evolving landscape.

Auto Insurance: Auto insurance serves as a crucial financial safeguard in the event of vehicle accidents or damages. It covers not only collisions but also losses caused by theft, fire, or natural disasters. The coverage extends to damages to the vehicle, medical expenses for the driver and passengers, liability in case of an accident, and sometimes property damage to others. Factors like the vehicle's make and model, driving record, location, age, and even credit score can influence coverage determinations.

Homeowners Insurance: Homeowners insurance protects against losses and damages to a home and personal property. This coverage encompasses the physical structure of the home, personal belongings, loss of use expenses, and liability protection. However, it's essential to note that homeowners insurance typically does not cover damages caused by earthquakes or floods, normal wear and tear, business-related activities, or intentional acts by the homeowner.

Renters Insurance: Renters insurance is designed for individuals renting residences, covering losses and damages to personal property. It's important to distinguish that renters insurance does not cover damages to the physical dwelling; instead, landlord insurance is responsible for that aspect, including liability protection for accidents within the rental property.

Business Insurance: Business insurance is a broad commercial offering that protects businesses from financial losses due to unforeseen events. It can include property insurance, business liability insurance, covering general liability, liability insurance for accidents or injuries on the business property, business interruption insurance, professional liability insurance, and cyber liability insurance.

Flood Insurance: Flood insurance is specific coverage for properties impacted by flooding. It protects against financial losses related to property and personal belongings damaged or destroyed by floods. Unlike standard home or business insurance, flood insurance is often provided as an extension to a policy for properties in flood-prone areas.

Earthquake Insurance: Earthquake insurance is tailored for individuals or businesses in earthquake-prone zones. It covers damages caused directly by earthquakes, such as the cost of repairing or rebuilding a property. However, it typically excludes damages caused by other earth movements, floods, or natural disasters.

Umbrella Insurance: Umbrella insurance provides additional liability coverage beyond the limits of other property and casualty insurance policies. It acts as an extra layer of protection, covering specific measures outlined in the policy. This can include property damage, injury, legal costs, and major claims that might not be covered under normal liability insurance policies.

In conclusion, these property and casualty insurance types play a crucial role in mitigating financial risks associated with various unforeseen events, providing individuals and businesses with the necessary protection and peace of mind.

What Types of Property and Casualty Insurance Are There? (2024)

FAQs

What type of insurance is P&C? ›

Property and casualty insurance is a broad insurance, which includes coverage to your structure, property and belongings in the event of vandalism, theft, and more.

What are the three main types of property insurance coverage? ›

Understanding Property Insurance

There are three types of property insurance coverage: replacement cost, actual cash value, and extended replacement costs.

Which is not a type of property and casualty insurance? ›

While P&C insurance includes many specific types of insurance, it does not generally include health or life insurance. Health and life insurance only cover the insured individual, not any property damage they own or liability for damage to others.

What's the difference between casualty or liability insurance and property insurance? ›

Property insurance helps cover stuff you own like your home or your car. Casualty insurance means that the policy includes liability coverage to help protect you if you're found legally responsible for an accident that causes injuries to another person or damage to another person's belongings.

What is the largest P&C insurance company in the US? ›

1. State Farm. State Farm is the industry's biggest player, both in the US and overseas. The Bloomington, Illinois-based P&C insurance giant wrote almost $78 billion worth of premiums in the past year.

How do P&C insurers make money? ›

Insurance companies make money in two main ways: Charging premiums to the insured and investing the insurance premium payments.

What is the difference between HO3 and HO6? ›

What's the difference between HO3 and HO6? The main difference between an HO3 policy for a single-family home and an HO6 condo insurance policy is that while an HO3 covers the physical structure of your home itself, an HO6 policy only covers what's inside the walls of your condo.

What are the 2 types of home insurance? ›

What are the different types of homeowners insurance?
  • Dwelling coverage is the basis for all homeowners insurance policies. ...
  • Contents coverage protects items including furniture and clothing in your home.

What are the two types of property coverage? ›

There are two types of personal property coverage: replacement cost and actual cash value.

What is property and casualty insurance for dummies? ›

Property and Casualty Insurance are types of coverage that help protect your property and those covered by the policy in case of an accident. Property Insurance protects the assets you own. The most common types of property insurance policies are: Homeowners. Auto.

What is casualty in P&C insurance? ›

Casualty insurance provides liability protection, which helps protect you if you're found legally responsible for an accident that causes injuries to others or if you damage another person's property.

What are the three hazards most related to property and casualty insurance? ›

Common types of insurance hazards

Hazards are commonly broken out into three main groups — physical hazards, moral hazards, and morale hazards — but physical hazards are what insurance inspectors are looking for when they assess your property.

What does PNC stand for in insurance? ›

Primary and noncontributory endorsements or policy language make a specific insurance policy primary, meaning, to go first, and noncontributory, meaning, without contribution, over other insurance policies of a specific party; this party is typically an additional insured.

Is general liability a casualty? ›

Casualty insurance comprises various policy types, including auto insurance, homeowners/condo/renters insurance, burglary and theft insurance, workers' compensation, commercial general liability insurance, public liability, pollution liability, and contaminated product insurance.

What is the meaning of CL in insurance? ›

Contractual liability insurance helps protect small business owners from claims due to contracts.

Is commercial insurance a P&C? ›

Commercial property and casualty insurance, also called commercial P&C insurance, combines two types of insurance to cover you for some of the most common types of risks your business faces. Below, we'll help you understand what this coverage entails and why you shouldn't go into business without it.

What lines of business are in P&C insurance? ›

Equipment Breakdown Insurance
  • Commercial Property and Casualty Insurance.
  • Commercial Automobile Insurance.
  • Workers' Compensation Insurance.
  • Commercial Umbrella Insurance.
  • Business Interruption Insurance.
  • Builders Risk Insurance.
  • Equipment Breakdown Insurance.

What are the different types of insurance? ›

For Consumers
  • Types of insurance. Auto. Health. Home. Life. Long-term care. Annuities. Business. Boat/marine. Credit insurance. Crop. Dental. Natural disasters. Sharing economy. Surplus line insurance. Travel. Extended warranties & service contracts.
  • Podcast: OIC Answers.

What are the risks of P&C insurance? ›

Risk management in the property and casualty (P&C) insurance industry refers to the process of identifying, assessing, and controlling risks. These can stem from a wide variety of sources, including accidents, natural disasters, financial costs, legal liabilities, strategic management errors, and more.

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