P&C Basics

Categories: Education, P&C InsurancePublished On: September 24th, 2021Comments Off on P&C Basics17.8 min read

Although there are many different types of insurance, many of them can fall into the broader category of P&C insurance. Also known as property & casualty insurance, it helps to consolidate your insurance into the two main groups of its namesake. Property insurance covers your physical property, like your home, vehicle, and possessions; casualty insurance (aka “liability insurance”) protects your losses in the event that you cause damage to someone’s property or injury to another person. One thing to be aware of is that your health insurance and life insurance policies do not fall under P&C; as such, you will need to have separate policies specific to those types.

Below are a list of policies and insurance types that would fall under the P&C category:

Homeowners insurance (theft, fire, damage to your property, injury occurring on your property)
Auto insurance (medical costs from an accident in/on your vehicle and repairs)
Landlord insurance (the physical structure of a rental property or incidents that may happen)

While this may seem cut and dry, it is important to know the details of your policy; there are certain “situational” events that can occur, and without planning you may find yourself with the short end of the stick:

Package thefts – While break-ins are generally covered in any homeowners insurance, package thefts are not as clear, as it is something that occurs outside of the physical house.

Wildlife – Those in the city may not need to worry about this one, but if you live in the mountains unwanted visitors may be more common than you think. However, damage caused by pets or preventable incidents likely do not qualify for coverage.

Space invaders – No, we’re not talking about aliens. Instead, this would refer to falling objects that are out of your own control.

Whether you are buying your first few policies or looking to renew your current ones, make sure to take a look at the riders that are available to you. Riders are add-ons that provide extra features or change policy terms, usually for more specific scenarios. For example, you can add a replacement cost rider to your homeowner’s insurance; in the event of a fire, you would be covered for the cost of your home, but not necessarily for the costs the rebuilding process. Another common one to consider adding is the law or ordinance endorsement: if only a portion of your home is damaged, a contractor may discover that your house no longer meets current building code standards. This rider would make sure you won’t have to pay out of pocket to get everything updated.

For those who already have their own policies, it is still a good idea to follow the “two-to-three” rule. Every two to three years, take a look and see what is available for the policies you need. You may find that prices have changed, or that you can get a better deal for what you are currently paying. You can also consider adjusting your deductible, allowing you potential savings on annual premium costs.

Lastly, take a look at whether there is a bundle package that covers what you want and need. When you use the same insurer for multiple policies, this can easily lead to discounts and access to more affordable riders.

The worst time to find out you don’t have the right coverage is after you need it, so don’t procrastinate and start doing your P&C research homework today.