What Is Property and Casualty Insurance?

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Property and casualty (P&C) insurance is an umbrella term for various insurance products that protect your home, car or another type of asset against loss or damage. P&C insurance also provides coverage when you're financially liable for another person's injuries or damages and losses to their property.
Since P&C insurance applies to drivers, homeowners, renters, business owners and more, you're bound to purchase an insurance policy at some point in your life. This beginner's guide will break down the property and casualty insurance basics and the different types of coverage.
What Is Property and Casualty (P&C) Insurance?
Property and casualty insurance, or P&C insurance, broadly describes various types of insurance policies that help protect you and your property.
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Property insurance helps pay for your stuff when it's damaged or stolen.
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Casualty insurance provides liability coverage when you're involved in an accident where another person's body is injured or property is damaged.
P&C insurance is useful to homeowners, drivers, apartment renters, landlords, business owners and more.
Fun fact: P&C insurance underwriting as we know today may have started as early as 1735 when the first fire insurance firm was formed, according to the Insurance Information Institute. Beyond fire damage, today's insurance policies now protect against theft, natural disasters, vehicle collisions, injuries and more.
How Does Property and Casualty Insurance Work?
Property and casualty insurance is a tool for individuals and businesses to recover from losses after a covered incident. When you take out an insurance policy, you pay premiums (usually monthly) to the company in exchange for coverage against specific perils, like fire damage or theft. The purpose of paying premiums is to divide the risk among all the policyholders, thereby reducing the risk for everybody.
Consider this (super) simplified example:
You're one of 1,000 auto insurance policyholders and you each paid a $1 premium. The insurance company has $1,000 in premiums total. Now, let's say you get into a car accident and it costs $100 in repairs. The insurance company approves the claim and pays out $100. You paid only $1 but benefited from $100 in coverage because the risk and financial burden were shared among the 999 other policyholders.
Without insurance, many people would be crippled by the full financial burden of recovering after an incident. P&C insurance gives people the means to recoup some of their losses (on covered claims) — drivers can offset the costs of repairing their vehicle after an accident and business owners can pay for expensive legal fees if sued.
Property and casualty insurance can help to prevent losses. To qualify for a policy, the insurer may incentivize certain behaviors that can prevent the occurrence of property and casualty insurance claims. Drivers, for example, often enjoy special discounts when they drive safely and hold an accidents-free history. Homeowners can reduce their insurance premiums by installing security features, like deadbolts or a burglar alarm.
Types of Property and Casualty Insurance
Property and casualty coverage can vary by the type of insurance policy you carry. Below, we've summarized the most common types of insurance.
Insurance Policy |
Description |
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Protects you and your vehicle against damages and liability after an accident. Additional coverage can protect against theft, vandalism and more. |
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Protects your home and personal belongings against covered perils, including fire and theft. Liability coverages pay for damages or medical bills when somebody is injured on your property. Policies may include loss-of-use coverage, which pays for living necessities if displaced from your home. |
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Provides personal property coverage (e.g., your electronics, furniture). Liability coverage is often included, which pays for property damages or medical bills if somebody is injured while inside your unit. Loss-of-use coverage may also be included. |
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Pays for damages to the interior of your unit and medical payments for those injured on your property. Loss-of-use coverage may also be included. |
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Can protect the company against various risks, including lawsuits, loss of income, business property damage, bodily injury ,advertising injury, malpractice, negligence and more. |
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Landlord insurance |
Pays for damages and liability costs related to owned income-generating property. Coverage includes specific perils, like fire, and the landlord benefits from liability protection when a tenant is injured on the property. |
Umbrella Insurance |
Umbrella insurance provides coverage when your other insurance policies are insufficient. If your homeowners, auto or another type of insurance is not enough to pay for a covered incident, then umbrella insurance kicks in to make up the difference. |
Power Sports Insurance |
Provides damage, loss and liability coverage for specialized vehicles, such as boats, golf carts, snowmobiles and all-terrain vehicles. |
What's Not Part of Property and Casualty Insurance?
Health insurance and life insurance do not fall under the umbrella of P&C insurance. After all, your person, health and life are not considered property. (Although they belong to their own category, health and life insurance are still worth your consideration!)
The insurance policies listed earlier are not all-encompassing, either. Below, take note of what's NOT covered to avoid surprises when you're found legally responsible for a non-covered claim.
Insurance Policy |
NOT Covered* |
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Auto Insurance |
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Condo Insurance |
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Commercial Insurance |
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Landlord Insurance |
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Umbrella Insurance |
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Power Sports Insurance |
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*Insurance coverage can vary by the insurance company and policy.
Solutions to All Your Property and Casualty Insurance Needs
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