Insurance property casualty
Insurance property casualty is designed to indemnify the insured. The insurance industry's definition of indemnify is to make whole. If you suffer a loss and have the proper coverage, you should put back in the same place you were before the loss. In addition to the actual loss, insurance property casualty coverage covers your legal bills as well as other loss adjustment expenses. This may include the costs of estimates, adjusters, expert testimony or other associated costs.
Insurance property casualty covers loss or damage to real property from specified events. It is a catchall term that encompasses almost all coverage that is not life, property, or health insurance. The most important category of insurance property, liability insurance, covers the legal liability to third parties from specified events. property casualty claims may result from the same insured event, for instance, automobile accidents as well as environmental damage often yield claims both types of coverage. Reflecting this fact, property casualty insurers offer policies that cover casualty as well as property, called multiple peril insurance.
Personal lines of insurance property casualty are sold to individuals or households, while commercial lines are sold to businesses. Insurers may position certain products as loss lenders to obtain other lines. For instance, insurers often price homeowner's insurance low in an attempt to obtain more profitable automobile insurance.
The ten largest types of insurance property casualty in order of the amount of net premiums earned a few years ago were:
Personal automobile liability 88 billion dollars.
Personal automobile property 62 billion dollars.
Homeowner's multiple peril 47 billion dollars.
Workers' compensation 40 billion dollars.
Other liability 29 billion dollars.
Commercial multiple peril 28 billion dollars.
Commercial automobile 25 billion dollars.
Reinsurance 14 billion dollars.
Medical malpractice 7 billion dollars.
Inland marine 7 billion dollars.
Although the three largest lines of business are personal and commercial insurance as well as personal insurance are roughly equal in terms of net premiums earned, reflecting the far greater number of commercial lines. property casualty is also roughly equal in terms of net premiums earned.
To conclude, a recent trend is the development of products that combine features of traditional insurance property casualty policies as well as traditional financial instruments used to raise capital. Collectively, these products fall under the rubric alternative risk transfer. Such products include catastrophe bonds whose face value need not be repaid if a specified catastrophe occurs, catastrophe options for which the writer pays the holder a specified amount if a specified catastrophe occurs and contingent equity that provides the provider with the option to raise equity if a specified event occurs. These alternative risk transfer products essentially securitize risks that could have been absorbed by insurers.
Other Articles
