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Casualty insurance is a form of liability coverage that protects against property damages or injuries that occur to another person. If you are found to be at fault for these damages due to a negligent act or omission, then an individual can sue you to cover the amount. 

Types of Casualty Insurance

Casualty insurance is a broad term that encompasses many other types of insurance. For example, automobile insurance is a type of casualty product, as is homeowners’ insurance, renters’ insurance, or landlord insurance. 

In addition, it can also include theft insurance, as well as worker’s compensation.

How Does It work?

To be held legally liable for personal injury or property damages, you must have demonstrated negligence. This is the failure to use reasonable, proper care in your personal actions. 

If the court deems that you acted negligently, or that your failure to act caused an incident, then they could hold you responsible for any loss that occurs as a result. In the insurance industry, liability losses are often called third-party losses. 

The three parties involved include:

  • First party: Insured individual
  • Second party: Insurance company
  • Third party: Person to whom the insured is liable for damages

Property and Casualty Coverage

Typically, casualty insurance is paired with another similar policy: property protection coverage. Together, these form what’s known as P&C, or property and casualty insurance. 

The “property” portion of a P&C policy protects property that you own. This may include your:

  • Home
  • Condo
  • Automobile
  • Rental property
  • Personal possessions

The “casualty” portion of a P&C policy centers on liability protection. If you are found to be legally responsible for an accident that injures another person or damages that person’s property, then you could be found liable for covering those associated costs. 

A P&C policy can protect the insured against a range of different scenarios. For example, if you accidentally injure someone with your vehicle, then an automobile insurance policy with bodily injury liability coverage can pay for any medical and legal costs associated with the injury. If your vehicle damages someone else’s property, then a P&C policy can help cover those costs, up to your coverage limit. 

Casualty Insurance for Landlords

Landlords who own real estate property and lease it out to someone else can benefit from casualty insurance coverage and a more comprehensive P&C policy. This way, you will have two types of coverage to protect you against financial loss: property and liability. 

If an individual is injured on your rental property, you could be found responsible if the injury stems from a negligent act or omission on your part. If this happens, the casualty portion of your landlord insurance policy can help you pay for that individual’s medical bills or legal expenses.

For instance, a tenant could fall down the stairs at your rental property. If the stairs are in acceptable shape, it could be deemed an accident and you may not be responsible. However, if the court determines that the injury occurred because the stairs or railing were not properly maintained, then you could be at fault.

If you have casualty coverage as part of your landlord insurance, then your policy may help pay for those expenses. In most cases, you will not have to pay a deductible for a liability claim. 

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