What Is Property and Casualty Insurance?

Last Updated on December 28, 2025

Property and casualty (P&C) insurance is a broad category of coverage that protects the things you own (property) and helps pay when you’re legally responsible for someone else’s injuries or damage (casualty).

If you carry car insurance, homeowners insurance, renters insurance, or condo insurance, you already have some form of P&C insurance. The key is understanding which part of your policy pays in a given situation—and what’s excluded.

Key Takeaways

• Property and casualty (P&C) insurance is a category of policies that protect your belongings (property) and your legal responsibility to others (casualty).
• Property coverage typically pays to repair or replace covered items after a loss, while casualty coverage typically pays for liability claims like injuries, property damage, and legal defense.
• Auto, homeowners, renters, condo, landlord, and many specialty policies (boats, motorcycles, ATVs) are all common types of P&C insurance.
• Your biggest “money levers” are policy limits, deductibles, and exclusions—so review your declarations page to avoid surprises at claim time.

What Is Property and Casualty (P&C) Insurance?

P&C insurance isn’t one single policy. It’s an umbrella term for many insurance products that fall into two buckets:

• Property coverage helps repair or replace your stuff after a covered loss.
• Casualty coverage helps protect you when you’re liable for injuries or property damage to others.

P&C insurance includes personal policies (like auto and homeowners) and commercial policies (like business liability and commercial property).

Property Vs. Casualty: The Two Sides of P&C

How Property Coverage Works

Property coverage pays to repair or replace your covered property after a covered event. Your policy may pay based on replacement cost or actual cash value (depreciated value), and you’ll typically pay a deductible before coverage kicks in.

When a claim is approved, the goal is usually to return your property to pre-loss condition—or, if it can’t be repaired, to pay you based on how your policy values the item or structure.

How Casualty Coverage Works

Casualty coverage is about responsibility. If you’re found legally at fault for hurting someone or damaging their property, casualty coverage can pay for things like medical costs, repairs, legal defense, and settlements—up to your policy limits.

For example, if you cause a crash, you could be responsible for the other person’s medical bills after an accident plus other damages. That’s where liability coverage can protect you.

Common Types of Property and Casualty Insurance

These are some of the most common P&C policies consumers buy:

• Homeowners insurance (dwelling, personal property, liability, and additional living expenses). Many people reduce costs by learning how to bundle auto and homeowners insurance to save money.
• Auto insurance (liability, collision, comprehensive, medical-related coverages, and optional add-ons). If you’ve ever wondered what “full coverage” really means, see liability vs. full coverage.
• Renters insurance (personal property and liability for renters). Some insurers offer a discount for buying renters and car insurance together.
• Condo insurance (personal property, interior improvements, liability—while the HOA master policy covers shared/common elements).
• Landlord insurance (property and liability for rental properties).
• Powersports and specialty policies like motorcycles, boats, and ATVs—if you’re unsure whether you need it, check do you need ATV insurance?

What P&C Insurance Typically Covers (and What It Doesn’t)

Coverage details vary by policy and state, but here’s a practical way to think about it.

Examples of Property Losses P&C Can Cover

• Paying for vehicle repairs through your insurance company after a covered loss
• Covered theft or vandalism (for example: does my car insurance cover theft?)
• Replacing your car after a covered total loss (see what happens if your car is a total loss)
• Optional upgrades like new car replacement insurance on qualifying vehicles
• Broken auto glass, if you carry the right coverage (learn about full glass coverage)

Examples of Casualty Losses P&C Can Cover

• Lost income claims after an injury (more on lost wages because of an accident)
• Temporary housing or transportation costs (see how a loss of use claim works)
• Non-economic damages in some situations (like pain and suffering settlements, depending on the claim and state rules)

Common Things P&C Insurance May Not Cover

P&C policies also have exclusions and limits. Common examples include:

• Wear and tear, poor maintenance, and gradual damage
• Flood and earthquake damage (often require separate policies or endorsements)
• Intentional acts and certain high-risk uses
• Business use of a personal vehicle or home (may require commercial coverage)

Always check your declarations page and policy wording so you know what’s covered, what’s excluded, and what limits apply.

How P&C Insurance Claims Work

Most P&C claims follow a similar process, whether it’s auto, renters, or homeowners:

1. Document the loss (photos, receipts, repair estimates, and a police report if needed).
2. Report the claim and answer follow-up questions from the insurer.
3. Work with an adjuster to evaluate damage and coverage.
4. Pay your deductible on property claims where it applies.
5. Get paid or repaired based on your policy terms and coverage limits.

Fault and responsibility matter most on the casualty side. In many accidents, responsibility can be shared—here’s what to know about whether both parties can be at fault in a car accident.

Not sure whose policy should be handling the claim? This guide on whether to file a claim with your auto insurance or their auto insurance can help you decide what’s best for your situation.

How to Choose Limits and Deductibles

When people get surprised by a claim, it’s usually because of limits (how much the insurer will pay) or deductibles (how much you pay out of pocket first).

Liability limits are especially important because serious injuries can get expensive quickly. Choose limits that protect your finances—not just the minimum required by your state.

Deductibles are a tradeoff: higher deductibles usually lower your premium, but you’ll pay more out of pocket when you file a claim. For property claims, it’s smart to set a deductible you could realistically cover from savings.

FAQs on Property and Casualty Insurance

Final Word on Property and Casualty Insurance

Property and casualty insurance helps protect what you own and your financial future. Property coverage helps repair or replace your belongings after covered losses, while casualty coverage helps when you’re liable for injuries or property damage to others.

Auto insurance, homeowners insurance, renters insurance, and many specialty policies all fall under the P&C umbrella—so once you understand the two sides, it becomes much easier to understand what your policy does (and doesn’t) do.