What Is The Relation Between Property & Casualty Insurance?
Property and Casualty insurance is the type of insurance policy that protects you and your property as a whole. These policies provide you coverage against all the damages and losses that are occurred to your property or caused by you to another person’s property or life.
Property and Casualty insurance is also known as P&C insurance which does not include other types of insurance coverage like life insurance, health insurance, and fire insurance.
What Is Property Insurance?
Property insurance provides risk coverage against your personal property from various unusual events and risks like fire, theft, lightning, etc. Property insurance is a combination of various specialized insurance like homeowner insurance, earthquake insurance, flood insurance, renters insurance, etc. It provides protection to the owner of the property and structures the contents of the property.
Property Is Insured Against Two Types Of Perils-
Open perils- It covers for all the causes of loss not excluded in the policy. Some of the common exclusions in open perils are Earthquake, Floods, terrorism, etc.
Names perils- in named perils, the actual cause of loss needs to be listed in the insurance policy. Some of the named perils include fire, explosion, theft, etc.
Types Of Property Insurance Coverage
Broadly there are three types of property insurance coverage-
1) Replacement Cost
Replacement cost coverage covers the cost of replacing and repairing with the same kind of assets of the same value regardless of depreciation or appreciation. This coverage is based on replacement cost value instead of the actual cash value of items.
2) Actual Cash Value
Actual cash value provides coverage for replacement cost minus depreciation. The insurance company will pay for the occurrences in a particular situation. For an instance- if some item is destroyed and it is 5 years old then you can only expect the 5-year-old price of that item, not the present value.
3) Extended Replacement Costs
Extended replacement costs pay more than the coverage limit. This limit will not exceed 25% in spite of the fact that the cost of construction has gone up. The maximum amount that insurance companies will pay for the occurrences in a particular situation.
Why It Is Necessary To Buy Property Insurance?
1) Risk Coverage Against Uncertain Natural Events
As natural calamities like earthquakes, floods, tsunami, etc. Are uncertain events and moreover we can’t control the happening of these events. But what can protect you against the financial loss faced by it is property insurance. Property insurance also provides coverage against “act of god” and natural calamities
2) Coverage Against Man-Made Risks
Your property is under risk from man-made events. You can get protection from various safety equipment like CCTV but these gadgets don’t provide a guarantee of financial loss. So in order to safeguard your property from man-made threats like terrorism, theft, burglary property insurance can protect.
3) Compensation Against Business Losses
Property insurance also provides you cover against business losses due to some unusual events like machinery breakage, system crashes, etc. With it, you will be able of getting compensation against business losses incurred during that time period.
4) Protect The Assets Of Your Property
if your property insurance also provides you cover against content or stuff then you are also eligible for the cover against financial losses to the assets of your property. Content insurance provides financial coverage to the various property assets like furniture, electronic appliances, and other precious stuff that you want to secure in the time of crisis.
What Is Casualty Insurance?
Casualty insurance refers to coverage for all the losses caused by the insured person to others or legal liabilities imposed on the insured. This insurance provides coverage to individuals, employers, against loss of property and other liabilities.
Let’s consider a hypothetical situation to explain the concept of casualty insurance in more detail
Suppose jack by mistake hits Ronnie’s car, resulting in damage to the car of 5000 rupees. Now legally jack is liable for those damages and must pay for all the wear and tear. But here the concept of casualty insurance shines out which would protect jack from paying for these damages out of his pocket and bear all the expenses on its own.
Why To Opt Casualty Insurance In Business?
If you are running your own business then you should understand the concept of casualty insurance depending upon u r type of need. One of the important casualty insurance types for businesses is workers’ compensation insurance that protects a company from all the liabilities that are raised by the workers while doing their job. For example if someone is injured.
If you have an online business then different casualty insurance types like cyber fraud insurance, identity theft insurance, etc can opt. You can also ensure your computer system in a separate policy.
It is important for every business to have casualty insurance coverage because no one wants to harm anyone. Liability insurance covers all the risks that arise by the insured person to its customer for which the insured person is liable.
How To Choose Property & Casualty Insurance?
A local agent can help you to provide you the perfect advice related to what type of coverage is right for you as per your requirements. He or she will also ensure maximum protection to the insured person so that one can peacefully enjoy daily life without the stress of any financial losses to life and property.
It is suggested to buy property and casualty insurance from a trusted agency. As it gives detailed information and a quick claiming process in case of losses.
Casualty and property insurance are two sides of the same coin like property insurance protects your property on the other hand casualty insurance protects you from all financial losses for which you were liable to pay through your pocket. Casualty insurance bears all the expenses for the damages done by the insured person to a property or an individual.