When’s the last time you reviewed your property and casualty insurance? While yours might not have been at the top of your to-do list, spring is the perfect time for an annual check-in. 

That’s because a little risk-management maintenance now can help protect you throughout the year. So make the most of the next rainy spring day as you take some time for a property and casualty insurance review. Here’s what you need to know. 

And in case you’ve been wondering, “Wait … what is property and casualty insurance, anyway?” let’s start there.

What Is Property and Casualty Insurance?

Property and casualty insurance, or P&C, is a hypernym used to describe several different types of insurance policies.

Property insurance covers your physical property, like your home, vehicle, and possessions. 

Casualty insurance, also known as liability insurance, covers you for losses in the case that you cause damage to another person’s property or injury to another person.

It’s highly likely that you already have some form of P&C insurance coverage. In fact, you probably have several insurance policies that are be classified as P&C. Here’s where you can begin.

Policies that can include property and casualty insurance

Homeowners insurance

A homeowners insurance policy helps protect your home and possessions against covered perils, including theft and fire. Most policies also include liability coverage that may help protect you if someone is injured at your home or if you cause damage to someone else’s property. This personal liability coverage protects you if a guest is injured on your property or you cause damage to someone else’s belongings elsewhere.

Auto insurance

If you’ve secured an auto insurance policy, you likely have casualty — known as liability or collision — coverage for your vehicle. This comes in handy if you damage someone else’s vehicle or harm someone in a vehicular accident. Your policy may also include coverage for medical costs incurred during an accident for both you and your passengers. Adding property, or comprehensive coverage, to your vehicle can help reduce repair or replacement costs in the event of auto damage for reasons other than collision. 

Landlord insurance

If you own a rental property, landlord insurance protects the structure itself — but not the renters’ possessions. It can also provide liability coverage if litigation results from an incident on the property. Plus, it can cover some of your possessions inside the home, particularly non-moveable built-ins and the appliances you furnish to your renters.

Policies that do not include property and casualty insurance

Health insurance

Your health insurance policy will cover your medical costs and those for any dependents listed on the policy, but it will not cover any lost property or the medical costs other involved parties accrue. Nonetheless, it sure can come in handy if you’re injured in an auto accident!

Life insurance

A life insurance policy can help provide financial support for your beneficiaries after your death. But it will not cover any property damage or liabilities in the event of an accident or otherwise. That said, some auto insurance policies include provisions for death due to an auto accident, so you may want to check your policy. 

Disability insurance

Otherwise known as income insurance, long-term and short-term disability insurance can replace lost wages or salary in the event of a disability. That means it could be helpful if you’re unable to work due to an auto accident injury. While it could be considered a type of casualty insurance as it covers lost wages, it doesn’t protect your property.

I Didn’t Know My Property and Casualty Insurance Covers That!

Speaking of coverage, let’s get down to some specifics. Here are three unique scenarios in which property and casualty insurance could help.

Unplanned hand-outs

With so much arriving to our homes via the mail and delivery services, porch pirates are a threat to packages outside doors. While homeowners insurance almost always covers break-ins, policies can vary when it comes to outdoor package theft. So instead of investing in a glitter bomb, speak with your insurance provider if you’re unsure about the details of your coverage.

Em-BEAR-assing visitors

I don’t see much wildlife near me — but, then again, Fort Collins proper isn’t a long way from the mountains! If you do, you could end up with some unwanted visitors. For example, if a bear finds its way into your garage and breaks a few windows on the way out, your homeowners policy should cover the damage. It’s important to note that damages caused by pets or preventable incidents — like mice rummaging through the walls — likely aren’t covered.

Celestial Surprises

While Saturn and Jupiter are light-years away, other threats lurk a bit closer to Earth. You might be surprised to learn that your homeowners insurance may protect you against falling objects — including asteroids and “space junk” — damaging your home. 

Property and Casualty Insurance Best Practices

Start your spring strong by making time to examine and confirm your property and casualty insurance coverage details. To get started, you can look for the following.

Make sure your coverage is adequate.

Property and casualty insurance carries limits. Find out what yours is and run some numbers. Is your coverage enough to properly protect your property and belongings and provide peace of mind? If not, you may look into increasing your limits or adding umbrella insurance to your policy for an additional layer of security.

Consider coverage riders and endorsements.

Riders are insurance policy provisions that add additional coverage to basic insurance policies or otherwise change policy terms. For example, you can add a replacement cost rider to your homeowner’s insurance. This protects you in several ways. The most common is this: If you insure your home and it’s destroyed in a fire, your insurance may not be enough to replace it if your policy only covers the actual cash value. 

Here’s why: Actual cash value would cover only what your home was worth at the time of the fire — not the full cost to rebuild it. If your home is several years old, depreciation can account for tens or even hundreds of thousands of dollars in costs for which your insurance company will not reimburse you. A replacement cost rider ensures you can rebuild your home exactly as it was without paying out of pocket — except for your deductible, of course.

Law and Ordinance Insurance Coverage

You may also want to consider a law or ordinance endorsement. Let’s say that a fire only damages a portion of your home. But when a contractor comes out to begin repairs, she discovers that your entire electrical system or roof needs to be replaced because it doesn’t meet current building code standards. A basic homeowners policy wouldn’t cover that. But if those updates are required by building code enforcement, you won’t have to pay as much out of pocket with a law or ordinance endorsement.

Check for new prices.

Follow the “three-to-five” rule. Every three to five years, get three to five competitive quotes from highly rated insurers. Don’t be afraid to hop around. Insurance rates can vary by insurer and even by neighborhood, and you want to make sure you’re getting the best deal without compromising value. This is important because different insurers experience different localized losses, and their policy costs will differ accordingly.

Understand your insurance deductible.

If you’ve been focused on planning your financial future and have built up your emergency reserve, consider increasing your policy deductibles. For example, increasing your auto insurance deductible from $250 to $1,000 could mean serious savings on annual premium costs. Consider how much you’re willing to pay out of pocket for damage or loss before your insurer would step in. And don’t forget to make sure you’ve at least that much in your emergency and future opportunities fund (EFOF)!

Bundle your policies.

Bundling your insurance policies with the same insurer often means discounts and access to more affordable riders and endorsements. Bundling options vary by insurer and can change from year to year. So even if you’re sticking with the same insurer, you may have different savings options you can take advantage of; just ask your agent.

When Don’t You Need Property and Casualty Insurance?

Some high-net-worth individuals and families might not need the same property and casualty insurance as those who are less wealthy. A few might even think that they don’t need insurance at all due to their vast resources. However, having more means having more to lose. Rather than going without P&C coverage, those with more wealth may simply choose higher deductibles as they can cover more out of pocket. At the same time, they may need additional umbrella liability coverage to protect their higher net worth.

No matter your net worth, you might not need auto insurance if you don’t drive. You could forego umbrella liability coverage if your at-risk assets are properly covered by your auto and homeowners or renters insurance. 

On the flip side, if you live somewhere, you most likely need homeowners or renters insurance. And since many states have minimum requirements for auto insurance, drivers must carry the appropriate coverage, no matter their net worth.

Is your property and casualty insurance right-sized for your needs? If you’d like to discuss your insurance coverage, don’t hesitate to reach out. I’ll help you navigate your way through your policies and conduct an insurance-related risk review. This way, we can make sure you’re covered adequately, identify any coverage gaps, and recommend the best ways to fill them. You can also feel comfortable asking for coverage advice without having to worry about getting an insurance sales pitch. 

The worst time to find out you don’t have the right property and casualty insurance coverage is after you need it. So look into your current policies and coverage options today.