What Is Property and Casualty Insurance?

Property and casualty insurance is an umbrella term used to describe any insurance policy that includes these two types of basic coverage:

These types of coverage are probably familiar to you already because they’re included in homeowners insurance, renters insurance, auto insurance, and more.  

In general, property and casualty insurance covers exactly what it says: property and casualty (or liability). The specific property or liability included in a policy depends on which kind of property and casualty insurance you’re talking about. 

As we’ve already hinted, there are several different types for different categories of property. For example, homes, vehicles, and businesses each require a different kind of property and casualty insurance. 

Most of the insurance policies you’ll purchase in your life will be some type of property and casualty insurance. Here, we’ll go over the most common types and explain exactly what they each cover. 

Notable exceptions to the P and C category are life insurance, health insurance, and dwelling insurance (aka fire insurance). They’re different because life and health insurance cover something completely separate from property and liability, while dwelling insurance only covers property and doesn’t include liability coverage. 

A property and casualty insurance company typically offers some or all of the following types of insurance: 

Your standard homeowners insurance policy is a type of property and casualty insurance because it includes both property and liability coverage. 

The property it covers includes your home itself, other structures on your property (such as a fence, shed, or carport), and your other belongings, such as furniture and clothing. 

The casualty, or liability, it covers includes medical and legal expenses you have to pay because of an injury or damage to someone else’s property that is legally your fault. If your kid’s friend trips and breaks an arm in your backyard, or if you knock over your neighbor’s fence with your lawn mower, the liability portion of your homeowners insurance would kick in to help you cover the costs of fixing the damage. 

Auto insurance counts as property and casualty insurance because it can include both property and liability coverage, although it doesn’t always. 

Throughout most of the US, all drivers are legally required to have liability coverage on their vehicle. This is the casualty part of auto insurance, and it covers injuries, damage to someone else’s car, or other property damage caused by an accident that’s your fault. 

In addition to your state’s minimum required liability coverage, you can choose to add collision and comprehensive coverage to your auto insurance to protect your property, namely your car. Collision coverage helps pay for damage to your own car after an accident, and comprehensive coverage helps pay for damage to your car caused by something other than a wreck, such as a break-in or natural disaster. 

Renters insurance, for people renting a house or apartment, is similar to homeowners insurance, but the property that it covers is different. Since the renter doesn’t own the building they live in, renters insurance doesn’t cover the building itself. But it does cover personal property that belongs to the renter, such as their furniture, electronics, and food items.

The casualty part of renters insurance works pretty much exactly the same as it does for homeowners. Liability coverage for renters helps pay for medical or legal expenses in case someone gets hurt inside your rented home and you’re found liable.   

Commercial property and casualty insurance protects businesses and their owners. The property portion can help pay for damage to buildings, equipment, or vehicles owned by the business, while the casualty portion helps cover expenses if the business is sued. 

Landlord insurance is another type of property and casualty insurance, and it’s the counterpart to renters insurance. While a renter buys property insurance that covers only their own belongings, a landlord buys property insurance that covers only the home or apartment building itself and any other structures on the property. 

The casualty portion of landlord insurance helps pay for medical and legal expenses if someone gets hurt on the rental property and the landlord is at fault. 

Condo insurance covers property similarly to renters insurance. It doesn’t cover damage to the condo building itself, but it provides coverage for pretty much everything inside the policyholder’s individual unit, including their belongings and, in some cases, fixtures such as flooring, countertops, and cabinets. 

Casualty coverage for condos is a little bit different because of the unique ownership situation of a condo. Condo insurance includes liability coverage for any injuries that occur inside the policyholder’s unit or because of a pet that belongs to the policyholder, but it doesn’t cover injuries that occur in common areas of the condo building, such as a swimming pool or gym. The condo association has to purchase a master insurance policy to cover liability for things that happen in common areas. 

In the insurance world, a casualty is damage to a person or piece of property. If someone gets hurt on your property, that’s a casualty. If a tree in your yard falls and crushes your neighbor’s car, that’s a casualty. 

Casualty insurance covers your expenses in the event of a casualty that’s your fault. It helps pay for medical bills, repairs to other people’s property, and legal expenses if you get sued as a result of a casualty. 

As opposed to insurance policies that bundle property and casualty insurance together, a casualty insurance policy on its own wouldn’t cover your property at all. It would include liability coverage only.