UPDATED: Mar 13, 2020
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In the insurance world, ‘casualty’ refers to any damage or loss incurred by the property owner. Casualty insurance, meanwhile, protects against unexpected casualties.
Car insurance is a type of casualty insurance. When you buy car insurance, you’re purchasing a policy that protects you against unexpected casualties – like damage to your vehicle or damage inflicted upon another person.
Casualty insurance not only protects drivers against property damage, but it also protects drivers against liabilities. If you injure someone or damage property while driving, then casualty insurance can cover your liability.
Types of Casualty Insurance
Common types of casualty insurance include auto insurance, aviation insurance, workers’ compensation coverage, and surety bonds.
Many business owners, for example, need to buy casualty insurance coverage in case the product they make ends up harming someone. Casualty insurance can protect you from any liabilities caused by your company’s service.
In the car insurance world, we most often hear of two types of casualty insurance: bodily injury (BI) and property damage (PD) coverage.
Bodily Injury Coverage: Bodily injury coverage is a type of casualty insurance required in most states. Different states have different required levels of bodily injury coverage. If a driver injures another person in a car accident, then bodily injury coverage will cost certain damages incurred by that person, including medical bills, lost wages, and other potential costs.
Property Damage Coverage: Property damage coverage is also required in most states. Property damage coverage covers the cost of repairing damage to any property. If you strike another vehicle, a fence, a home, or a business, for example, then your property damage casualty insurance will cover the costs of repairing that damage.
Overall, a casualty is any damage or loss to a person or thing, including any type of property, as a result of an accident. Casualty insurance, meanwhile, is any type of insurance that covers the loss of a person or thing as a result of an accident. Car insurance is just one type of casualty insurance.