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.
P&C Insurance Solutions from Guidewire
Guidewire InsuranceSuite
P&C insurers do more with the most trusted insurance software platform in the industry.
Tell Me More
Guidewire InsuranceNow
A core platform with out-of-the-box functionality and workflows to reach the market efficiently and effectively.
Tell Me More
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:
Learn More:
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 circ*mstances.
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.
