What Is Property and Casualty Insurance

Written by: Mary Gerardine

    Property and casualty insurance (P&C insurance) is a category of insurance coverages that protect property and business owners from potential costs stemming from property damage and personal liability claims.

    While property insurance and casualty insurance are two different lines of insurance coverage, most insurance agencies require their agents to earn licenses to sell both. That’s why all states offer a single P&C insurance license exam.

    To sell P&C insurance products, agents must have a P&C insurance license.

     

     

    Types of P&C Insurance

    Property insurance helps to cover the cost of replacing damaged or stolen items someone owns. Casualty insurance provides protection against personal liability claims, such as if someone claims you’re responsible for their injuries and files a lawsuit against you.

    Many different types of coverage fall under the category of P&C insurance. Some of these policies help individuals protect their personal property and offer liability protection while others target the needs of businesses.

    You can group some of these types of coverage in a single P&C insurance policy or you can purchase them separately.

     

    Personal insurance

    Some of the most common types of personal P&C insurance include:

    • Auto Insurance: Auto insurance actually can include both property insurance and casualty insurance. Most states require car owners to have liability insurance to cover costs related to medical expenses and/or car damage of another party in the event they cause an accident. Drivers also can purchase collision or comprehensive auto insurance, which are types of property insurance that cover expenses related to damage to their own vehicle.
    • Homeowners Insurance: Homeowners insurance also generally includes both property insurance and casualty insurance. The property insurance portion covers expenses related to damage to the structure of the home and its contents while the liability portion covers things like medical bills if someone sustains an injury on your property.
    • Condo Insurance: Condo insurance is similar to homeowners insurance. The main difference is that it typically only covers the interior of the unit because a different policy held by the condo owner’s association covers the exterior part of the building.
    • Renters Insurance: Like homeowners insurance, renters insurance also generally includes both property and casualty coverage. The main difference is that the policy won’t include coverage for damage to the actual apartment unit because the building’s owner will cover that in a separate policy.
    • Other Vehicle Insurance: While similar to auto insurance, these policies cover other types of vehicles like boats, motorcycles, RVs, etc.
    • Landlord Insurance: This type of coverage is similar to homeowners insurance in that it includes both property insurance and liability insurance. But, it specifically covers rental properties vs. properties in which the owner lives.

     

    Business insurance

    Some of the most common types of business P&C insurance include:

    • Workers’ Compensation Insurance: States require businesses with employees to have workers’ compensation insurance. This covers expenses related to medical bills and lost income if an employee sustains an injury in a workplace accident.
    • Disability Insurance: Some states require businesses with employees to have disability insurance, which pays for programs that cover an employee’s expenses if they can’t work due to an injury sustained outside the workplace.
    • Commercial Auto Insurance: Commercial auto insurance is similar to regular auto insurance, but it covers vehicles used for business purposes.
    • Business Owner’s Policy: A business owners’ policy (BOP) is a bundled P&C insurance policy that includes various types of insurance a business needs, such as general liability insurance and commercial property insurance.
    • General Liability Insurance: General liability insurance protects businesses against claims that they’re responsible for personal injuries, property damage, reputational harm, and more. It’s often included as part of a BOP.
    • Professional Liability Insurance: Sometimes called “errors and omissions” insurance, professional liability insurance protects businesses against claims of negligence and inaccurate or damaging advice.
    • Product Liability Insurance: This type of coverage protects businesses against claims that a product they sold caused the buyer harm.
    • Data Breach Insurance: This type of insurance protects businesses in the event that their customers’ personal data is exposed due to a data breach.
    • Umbrella Insurance: An umbrella insurance policy offers extra protection against liability claims in the event of damages that exceed the coverage limits of your other policies, such as general liability or commercial auto insurance.

     

     

    How To Get a P&C License

    Obtaining your P&C license is your first step to selling insurance products like homeowners, auto, commercial property, and professional liability insurance.  

    Requirements to get a P&C license

    The exact requirements to get a P&C license vary by state, but they usually include the following:

    • Complete Prelicensing Education. Some states require you to complete a prelicense education course before taking the P&C insurance exam. Even if your state doesn’t require one, a prelicense education course can help you study for your licensing exam and increase your chances of passing it on the first attempt.

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    • Pass the State P&C License Exam. The P&C insurance license exam tests your knowledge of the general terms, concepts, and policies related to selling property and casualty insurance.
    • Complete a Background Check. Most states require some sort of background check as part of the P&C license application process. Many also require applicants to submit their fingerprints. Your state will provide you with instructions for this step.
    • Submit Your State P&C License Application. State P&C license applications are usually available through your state’s department of financial services, department of insurance, state corporation commission, or other similar state office. The P&C license application will ask you for basic information, such as your full legal name, Social Security number, address, and any criminal history.

     

     

    What Is the P&C Insurance Exam?

    The questions on the P&C insurance license exam are split into two categories: general knowledge and state-specific knowledge. Each state administers its P&C license exam as a computer-based, multiple-choice test. But, details like the specifics of the exam, the number of questions, how much time you have to complete it, and the passing score can vary by state.

    Many people find taking the P&C insurance license exam as the most difficult step in the licensing process. According to the National Association of Insurance Commissioners (NAIC), the pass rate for the P&C insurance license exam is 54.9 percent.

    Taking a prelicense education course can increase your chances of passing, but you should still develop a self-study plan to ensure you’re as prepared as possible for the exam.

     

     

    Frequently Asked Questions

    What does P&C stand for in insurance?

    P&C stands for property and casualty. P&C insurance is a category of insurance policies that protect property and business owners from potential costs stemming from property damage and personal liability claims.

     

    What are some examples of P&C insurance?

    Some examples of P&C insurance include auto insurance, homeowners insurance, renters insurance, general liability insurance, and workers’ compensation insurance.

     

    What falls under property and casualty?

    Property and casualty insurance includes policies that protect property and business owners from potential costs stemming from property damage and personal liability claims. These include policies for auto insurance, homeowners insurance, renters insurance, general liability insurance, and workers’ compensation insurance.

     

    What is a P&C insurance license?

    P&C license allows an insurance professional to sell property and casualty insurance products, such as homeowners insurance, renters insurance, auto insurance, general liability insurance, and workers’ compensation insurance.

     

    How long does it take to get a P&C license?

    The requirements for obtaining a P&C license vary by state, but it could take at least two to eight weeks to get a P&C license.

    You’ll spend most of that time studying for the exam, including completing a prelicensing course (which some states require). After passing the exam, your state’s insurance authority will review your application — a process that could last anywhere from a few days to a few weeks.

     

    Is the P&C insurance test hard?

    The passing rate for the P&C insurance exam is 54.9 percent, according to the NAIC. Taking a prelicense education program can help give you the best chance of passing the exam.

     

    How do I get a property and casualty license?

    The exact requirements to get a P&C license vary by state, but they usually include the following:

    • Complete prelicensing education.
    • Pass the state P&C license exam.
    • Complete a background check.
    • Submit your state P&C license application.

     

    What can you do with a P&C insurance license?

    Along with qualifying you to work as an agent or broker, other jobs you can pursue with a P&C license include insurance adjusterinsurance underwriter, insurance investigator, insurance examiner, personal or commercial insurance lines manager, insurance operations manager, and insurance specialist.

    Sign up for our Insurance Jobs Board to access thousands of available insurance positions.




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    Information on this page has been gathered by a multitude of sources and was most recently updated on November 2021.

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