Can you explain casualty insurance?

By definition, casualty insurance is coverage against a person, organization, or businesses, personal liability. As the name implies, casualty insurance is related to damages that were caused by the policyholder. This differs from liability insurance, although both types of coverage apply to damages or injuries to people or property not connected to the property owner.

In common usage, casualty and liability insurance are treated as one and the same. A negligence claim against you and a liability claim against your property are handled by the same company, under the same policy. The truth is that a home insurance policy is not a single insurance policy, but instead is a collection of policies sold as a package to provide the most robust insurance coverage.

Casualty insurance is most common in car insurance, where the responsibility for the incident depends on who is at fault. That is, the person who caused the accident must have casualty insurance to pay for injuries and damages. More often than not, the "casualty" part of insurance is dropped, and it is more typically refused to as "liability" insurance, indicating that the person who caused the incident is liable for the damages. However, if the vehicle is also covered for theft or burglary, those two protections are not considered part of the casualty coverage. The policyholder cannot cause their vehicle to be burglarized or stolen, and therefore has no responsibility in restoring the situation to the original condition.

Historically, insurance was once categorized under 3 basic groups: life, fire-marine, and casualty. When insurance companies began writing package policies which included more than one type of protection, the terms merged, and the National Association of Insurance Commissioners made the decision that casualty insurance should be considered a blanket term for legal liability other than marine, health, life and non-causal property damage.