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- Casualty insurance can keep you on the road by meeting auto insurance requirements.
- Casualty insurance can protect you from getting sued for accidents on the road, at work, or at home.
- Casualty insurance also includes theft coverage.
When shopping for insurance, you need a few personal insurance plans:
- Medical insurance to cover trips to the doctor
- Life insurance to strengthen your financial future and prepare for the inevitable
- Home and auto insurance to protect your most valuable possessions
You might've loosely heard an insurance agent refer to themselves as a "property and casualty" insurance agent, but most people don't know what that means. Casualty insurance encompasses many policies protecting you from property damage, injury, and more.
Property (home, auto, etc.) insurance plans also have significant casualty elements. Here are five things to consider when shopping for casualty insurance policies and six examples of what casualty coverage does for policyholders.
Casualty insurance covers you when you're liable
We've all probably made an honest mistake before that impacted or harmed someone else. Legally, liability is when your actions (or lack of action) lead to harm, property damage, or injury. If you're liable, you'll need to cover the financial losses others experienced because of you.
That's where casualty insurance comes in. It covers financial losses like property damage, lost wages, or medical costs associated with mistakes caused by your neglect or other things deemed to be caused by you.
Casualty insurance often flies under a "property and casualty" umbrella
The insurance policies people are most familiar with are "property and casualty" insurance. In short, the policies combine property protection (for you) and casualty protection (for others if you cause harm). An example would be your liability auto insurance. You buy casualty coverage to meet state requirements and compensate others if you cause an accident. A property and casualty agent might also add collision car insurance, comprehensive, and other property insurance coverages to protect your property.
Similarly, a homeowners policy is built around property coverage to rebuild your home after a loss or replace your belongings. However, homeowners insurance also has a liability aspect of paying hospital bills if someone falls on your icy walkway, falls through a broken stair, is bitten by your dog, etc.
All this said, you probably already have some casualty coverage you could identify.
Casualty insurance plays many roles in our daily lives
You may not have heard of casualty insurance before, but you've probably discussed it with family, friends, and insurance professionals. It's also called third-party coverage, liability insurance, or P+C insurance, which stands for property and casualty.
In an everyday sense, home and auto are the most common examples of casualty insurance. If you run a small business, you might buy commercial auto and liability insurance to protect your customers and employees. In addition, some professions (from doctors and lawyers to plumbers and insurance agents) require liability coverage for individual practitioners. In short, casualty insurance is part of our everyday lives.
Some casualty insurance protects your property
Most casualty insurance is meant to protect others your actions might harm (and, by extension, to protect you from getting sued). However, the casualty insurance umbrella also includes theft insurance. Policyholders can add it to other policies, like auto or homeowners insurance.
As the name would suggest, theft insurance covers your personal belongings lost to theft. Qualifying property could include personal belongings like electronics, clothing, and jewelry. It could also include custom parts for your car or other built-in items.
Casualty insurance at work
Depending on your job, you may be covered by professional casualty insurance policies. For example, errors and omissions coverage for insurance agents and accountants or medical malpractice insurance carried by doctors (including your doctor) are vital types of casualty insurance.
If you work, you'll also be covered by workers' compensation. Business owners enjoy the benefits of medical coverage for employees who may be injured on the job. Employees avoid excessive medical bills for injuries sustained on the job hand in hand with other employee protections. This is true even for part-time employees and businesses with a single employee in many states.
When do you need casualty insurance?
Understanding casualty insurance can be tricky since the term is used for many policies. Here are some real-world examples of when casualty insurance can be helpful:
- You back into a parked car at the grocery store, causing significant damage to the other vehicle.
- You have long neglected to repair your fence until it falls over, damaging your neighbor's boat.
- Someone breaks into your car and steals your stereo system and expensive custom parts you had insured (if you bought the appropriate coverage with your auto insurance).
- You own a workshop, and one of your employees gets injured because the equipment needs to be serviced. They want you to cover medical bills and lost wages.
- You're an accountant who gives incorrect tax advice to a client, which causes the client to suffer financial losses.
- You're a self-employed plumber replacing a sink. You forgot to tighten a seal, and the bathroom floor must now be replaced because of the leak.
In each case and countless other scenarios, casualty insurance will cover the financial losses from negligence. A financial advisor or insurance agent can help you examine where you're at risk for liability and the protection you have from your current insurance policies. Then, they can guide you in building insurance policies that will give you peace of mind knowing mistakes will be covered when they inevitably happen.