What Is Casualty Insurance?
Casualty insurance is a type of insurance that covers you if you are legally liable for someone else's injury or property damage, such as a car accident or an accident in your home. Below we take an in-depth look at what accident insurance is, how it works, who files the claim, and whether it is worth getting or increasing your coverage.
What is Casualty insurance?
Casualty insurance protects you when you are responsible for someone being injured or your belongings being damaged. The circumstances under which you are covered depend on the specifications of your policy. For example, an auto insurance policy might pay to repair a neighbor's fence after they've entered it.
You will often see accident insurance grouped with property insurance and referred to as "property and casualty insurance" or "general insurance." While the accident portion protects you from the costs of injury and damage to other people or your property, the property portion of the injury insurance covers damage to your own belongings.
Accident insurance does not cover your own personal injury or property damage, or that of others listed on your policy.
If you own a business, business accident insurance can protect you when a customer is injured by one of your products or services.
How does Casualty insurance work?
Accident insurance is usually included in your insurance policy, so you pay for it when the insurance bill is due. Your policy and quotes can specify how much you pay for each coverage, making it easy to adjust limits to suit your budget and needs.
When looking at your policy, you will usually find accident insurance with third party coverage that you are at fault. For real estate policies, these coverages can appear as "personal liability," "personal injury liability," and "third party medical payments." Your auto policy includes this type of insurance under "bodily injury liability" and "property damage liability."
Business owners can purchase accident insurance coverage, such as workers' compensation, general liability, and employer's liability insurance (EPLI).
There are many scenarios in which your accident insurance would take steps to cover costs. For example, home insurance can pay legal fees and expenses associated with:
- Falls, Trips, and Slips - A guest trips over their feet while at home and breaks a wrist.
- Dog Bites: Your dog gets loose during your morning walk and bites another dog.
- Downed trees: A windy day causes a tree branch on your property to break off and blow a hole in your neighbor's roof.
Auto accident insurance can come into play in a number of situations, such as when someone in another car is injured in an accident you caused or if you accidentally hit a neighbor's mailbox while making a U-turn.
How do I file an Casualty insurance claim?
Each insurer handles the claims process differently. Generally, the other party will file the claim with your insurance if you are at fault for the damage or injury.
Auto and residential liability claims generally don't have a deductible, so your insurance covers all costs for approved claims up to their limits.
If you were injured or suffered property damage, you will likely be working with the other person's claims representative or insurance adjuster. Your insurer may pay your claim directly to you or to another entity, such as an accident repair shop.
Auto insurers use police reports, photos, data collected from you and the policy holder, among others, to determine who is at fault and if a liability payment should be made.
For any insurance claim involving injuries, it is crucial to gather as much evidence as possible to support your claim, such as immediate medical evaluations, photos and videos of what caused your injury, and witness testimony.
If the problem is with a landlord and you have unlimited health coverage, you can submit the bills directly to the insurance company without having to file a claim first.
How much accident insurance should I take out?
Liability limits are the maximum that an insurer will pay for a claim. Standard homeowners policies generally provide $ 300,000 in personal liability for property damage and injuries and $ 1,000 to $ 5,000 in third-party medical payments.
If your personal liability limits are sufficient to protect your assets in claims and lawsuits, your insurance is likely sufficient. If not, consider increasing your coverage to the highest level you can afford.
It is important to understand the distinction between liability coverage and third party medical payments. Liability takes over medical costs if you are responsible for someone else's injury. Medical payments are a more limited form of coverage that pays regardless of fault (and only for guests you invite to your property in the case of a homeowner's policy).
Each state defines minimum limits of liability for auto insurance, although these amounts may not be enough to cover expenses in a serious accident. As with home insurance, consider purchasing as much liability coverage as you can.
Tip: Umbrella policies are sold separately and can cover liability claims that exceed your home and auto insurance policies. The costs depend on factors such as your current liability coverage and your risk profile. Generally, a $ 1 million blanket policy costs between $ 150 and $ 300 a year.
Do I Need Casualty Insurance?
Typically, the only accident insurance you are legally required to carry is personal injury liability and property damage liability under your auto insurance policy.
Many states also require personal injury protection, and the amounts vary by state. There are no mandatory liability requirements for homeowners insurance policies, but standard homeowners insurance policies generally come with some protection, and the mortgage lender will have their own requirements.
Regardless of what the law requires, having adequate accident insurance protects you financially from paying out of pocket to cover costly legal fees, lawsuits, third-party medical expenses, and lost wages. Your state's minimum liability limits for auto insurance may also not be enough to fully cover costs after a serious accident.
Enjoy Watching This Video About Insurances
Source:The Money Guy Show
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