Is auto insurance property and casualty insurance?
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UPDATED: Oct 22, 2021
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- Technically, auto insurance is property and casualty insurance, although you won’t hear many companies calling it that
- Essentially, you are purchasing insurance to protect a specific type of property and to protect yourself against liability should anyone be harmed on or by that property
- There are some cases where an insurance company that specializes in only auto insurance will have more affordable rates than an insurance company with a broader product line
- The bottom line is that you need to choose the type of auto insurance coverage that will cover the most common types of accidents in your area
Yes, technically, auto insurance is property and casualty insurance, although you won’t hear many companies calling it that.
Instead, they tend to lump property and casualty insurance in with homeowners insurance and business insurance, but they really are one and the same.
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Often, when you purchase insurance, that insurance is purchased from a property and causality insurance company. However, that isn’t always the case.
Some insurance companies are financial companies, while others call themselves insurance groups. No matter what, however, the coverage is essentially the same.
What, exactly, is property and casualty insurance?
When you purchase insurance for your home, car or business, you are buying property and casualty insurance.
Essentially, you are purchasing insurance to protect a specific type of property and to protect yourself against liability should anyone be harmed on or by that property.
The property part of property and casualty insurance refers to the property itself. The casualty part refers to the injury of anyone on or by your property.
Here are some items that are covered by property and casualty insurance:
- General liability
- Workers comp
- Personal liability
A business has access to a broader line of property and casualty insurance than an individual does.
The reason for this is that a business has more aspects to cover, such as finances, product loss, management protection and so on.
Not every insurance company offers every kind of property and casualty insurance.
In fact, there are companies that specialize only in auto insurance or only in business insurance or only in high-risk insurance or another type of insurance coverage.
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Should I choose a specialty company or a company with more product options?
The answer to this really depends on your needs. If you have a house a car and a business, you might want to consider a company that offers property and causality insurance products for all of those things.
The reason for this is that you will qualify for more discounts if you have multiple policies with the same company.
If, however, you only need auto insurance, then you actually have more options.
There are some cases where an insurance company that specializes in only auto insurance will have more affordable rates than an insurance company with a broader product line.
This is because when an insurance company also offers business liability insurance, for example, then the incidences of claims are often higher.
This means larger rates for all of their policyholders because they need to continue to be able to meet their financial obligations in terms of claims.
It is for this reason that it is important to get a quote from multiple insurance companies before buying your insurance. In some cases, the big name, well known, company will have the lower rates.
In other cases, it will be the smaller local company that can save you money. If you don’t compare their rates, however, you won’t be able to know for sure.
How do I know I’m purchasing the right amount of property and casualty insurance?
Unfortunately, you can’t go online and ask how much insurance you should buy and expect any one answer. The truth is that this is something that you should base specifically on your particular situation.
The worst position you can find yourself in, however, is not having enough insurance after a car accident that you have caused.
The reason for this is that in tort states you can be sued for whatever your insurance doesn’t cover.
What you will need to consider is the value of your vehicle and the average cost of a new car in the US. In 2010 it was $29,000.
You also need to consider the average cost of an accident in your area.
Nationally speaking, in 2011, the average cost for an accident:
- That resulted in a death was $1.1M
- For serious injury was $61K
- For minor injuries was $21K
- For non-injuries was $8K
According to the National Safety Council, the costs are more than double that if you consider the quality of life impact as well.
The bottom line is that you need to choose the type of auto insurance coverage that will cover the most common types of accidents in your area. In general, this should ensure that you will have adequate coverage while you are driving.
Another option is to take a higher deductible but purchase higher coverage. That way, if the unthinkable should happen and you were to have a serious accident, then you wouldn’t have to worry about the financial piece at all, but that is up to you.
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