What is P&C insurance?

What is P&C insurance?

Insure your home, your vehicle, your property with P&C insurance.

Property and casualty insurance (Fire, Accidents, and Miscellaneous Risks) is a family of insurance policies whose common point is to cover the property of the insured. For example, car insurance, home insurance, or professional multi-risk insurance are P&C insurance, and, conversely, health, death, or life accident insurance are not P&C insurance since they protect people and not property. Find in this guide the exhaustive list of property and casualty insurance, prices in 2020, and answers to frequently asked questions.

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P&C insurance: definition

P&C insurance is a family of insurances that includes several categories of insurance that you know well: auto, home, professional multi-risk, etc. All these insurances cover the property of the insured daily in the event of damage such as fire, theft, water damage or natural disasters, etc.

P&C insurance, therefore, differs from insurance protecting people, such as health, death, disability, etc. insurance. As property and casualty insurance does not protect the insured and their person, it is often supplemented by guarantees to cover this damage (for example, civil liability guarantee to cover damage caused to others).

Who is property and casualty insurance for?

P&C insurance can be used by both individuals and professionals to protect their daily assets.

  • Some examples of property and casualty insurance:
  • Multi-risk home insurance: this provides compensation for a dwelling of which you are the owner or tenant and the property located there, for damage caused following a disaster or by third parties, as may be the case during water damage. Ask for your HRM home insurance quote for free;
  • Multi-risk professional insurance: it protects the premises of a company as well as the equipment and goods therein;
  • Professional car insurance: it protects the vehicles of a company that owns a certain number (vehicle fleet);
  • Operating loss insurance: it compensates for the effects of a company’s loss of turnover in the event of a decline in activity following a large-scale disaster;
  • Other insurance: motorcycle, scooter, telephone, school, etc.

The civil liability guarantees each of these insurances is supplemented by a Civil Liability guarantee to cover damage caused to persons and/or third-party property.

In conclusion:

P&C insurance protects the property of an individual or business. This is the common point between all the insurances listed above.

IARD insurance is compulsory?

Some P&C insurances are compulsory and others are highly recommended. For example, car insurance is compulsory for all motorists and home insurance is also compulsory for tenants, co-tenants, and co-owners. These two insurances are required at a minimum level, to cover damage caused to others in the event of an accident as well as rental risks. related to rented accommodation. Beyond these mandatory guarantees, everyone is then free to take out additional guarantees or not. For example, a motorist must at least take out car insurance to cover the damage he may cause to others (goods and people). He may also decide to cover the damage he may cause to himself or his property.

At the professional level, taking out insurance is generally not compulsory but strongly recommended! Only professional civil liability insurance is imposed for certain regulated fields: medicine, justice (lawyers, bailiffs, notaries, etc.), construction, tourism, etc.

Choose your property and casualty insurance contract

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In all this maze of offers offered by insurance organizations, here are some tips that will allow you to find the P&C insurance corresponding to your case.

Property valuation

This step is essential so that you can know the guarantees you need and especially the number of goods you need to insure.

As an individual or professional, when you take out a home or professional multi-risk insurance contract, you must indicate the area of ​​​​your premises and draw up an inventory of the real value of your property. Establishing an inventory means evaluating the value of furniture for a home, or the value of equipment and store products for professionals.

The expertise can be done by you or by an authorized expert. The second option is more reassuring since if an incident takes place, your insurance organization cannot oppose the total declared value.

In the event of a claim, your indemnities are reduced if the declarations you provide when subscribing to the contract do not correspond to reality.

Anticipate the risks

Group purchase – Luko Home Insurance:

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Take advantage of 3 months free, ie an exceptional discount of 25% the first year!

For professionals, incidents differ depending on the type of activity you carry out: a general practitioner in private practice and a heating engineer does not have the same needs in terms of property protection.

According to the Generali website, it is crucial to ask yourself this question:

What should be the amount of my compensation so that I can resume my activity as soon as possible?

This is called an action plan: you imagine a disaster, what you can do, and in what timeframe to get out of it quickly and resume your activity as soon as possible. If you have employees, it is recommended to list the actions of each for better responsiveness.

In addition, we absolutely must not neglect the risks of fire, which represent approximately half of the annual reimbursements conceded by insurance organizations.

About individuals with a home or other insurance, we also advise you to discuss this with your insurer, who is best able to tell you what type of guarantee corresponds to the situation in which you find yourself.

Select advice advises you to contact your insurer to assess the risks and your property. If you are not satisfied and want to change insurer, we invite you to make free quotes via Selectra’s home insurance comparator!

P&C insurance: take stock of your needs

Once you have assessed your assets and anticipated the risks, you must ask yourself the following question:

What do I need in my P&C insurance contract?

For this, some tips can help you: ask yourself what risks you want to cover, for what amount and what is your budget for the insurance premium. These answers will be effective for the orientation of your contract.

P&C insurance: the checks to be carried out

Like any contract to which you subscribe, you must be vigilant and check the special provisions it contains. Indeed, it is these elements that define the guarantees included as well as the amounts of compensation to which you are entitled. The redemption values ​​of your goods are also an important part of your contract.

What is replacement value?

The replacement value is a refund providing the possibility of exchanging the property that has suffered damage, against a similar product. This guarantee takes into account the evolution of the price on the market. In the event of a claim, the goods are therefore generally reimbursed at a value significantly lower than the purchase value (we speak of the value in use, or replacement, which takes into account the age of the good). Two parameters can play a role in increasing the value of reimbursement: the level of the insurance policy (the better the coverage, the better the objects will be reimbursed) and the age of the object (a very recent device will be better reimbursed than an appliance or piece of furniture purchased several years ago).

What are the forms of replacement value?

There are different forms of replacement value:

  • Use value: your property is funded according to its obsolescence coefficient.
  • The new value: you are reimbursed up to the value of the use of your property, in addition to additional compensation corresponding to the coefficient of obsolescence of the latter (capped at 25%).
  • The value in production cost: as its name suggests, the stock is funded concerning the production price.
  • The purchase value: reimbursement of stock and equipment according to its purchase value.

How is the P&C insurance contract evolving?

Over the years, it is common for the property and casualty insurance contract to evolve following changes on your part (example: change of vehicle, increase in the level of cover, etc.) or following changes by the insurer (increase in tariff for example ).

The property and casualty insurance premium index

It is important to consider the amount of your insurance premium, especially if it has been defined according to an index. This is what will determine the evolution of the price of your contract.

In the case of professionals, the movable capital insured must be taken into account in parallel. It is also necessary to regularly monitor that the new amounts are always in line with your expectations.

The change of situation

Remember to inform your insurer of any changes to your assets that are made during the year, such as an extension of your home or the purchase of new equipment.

If you omit the facts of change and a claim occurs, the insurance company is then entitled to apply the “proportional premium rule”, as described in article L.113-9 of the Insurance Code:

“If the observation [of the inaccurate declaration of the risk] takes place only after a loss, the indemnity is reduced in proportion to the rate of the premiums paid about the rate of the premiums which would have been due, if the risks had been fully and accurately declared. »

The proportional premium rule means that the insured has paid an insurance premium that is too lower than the premium he should have paid taking into account the real risk. The insurer is therefore entitled to cover the claim with a discount. The insured therefore still receives an indemnity, but this is reduced.

The calculation of the proportional bonus rule is carried out as follows:

Amount of damage assessed x (premium paid/premium due) = Amount of compensation paid

Let’s take a concrete example for better understanding:

an insured person has multi-risk home insurance for a house with 4 rooms and pays€450 annually. He then creates an additional main room but forgets to report it to his insurer and continues to contribute €450 when he should pay a contribution of €500 given this new room.

A fire occurs and damage estimated at €6,000 is assessed. The insurer may compensate the insured as follows:

6,000 x (450/500) = €5,400

What is the cost of property and casualty insurance?

The price of your property and casualty insurance depends on the insurance organization you use and the guarantees you choose. We invite you to discover the different existing insurers, compare the rates and guarantees they offer to find your home insurance. You can also visit this article dedicated to home insurance prices and this one dedicated to car insurance prices.

Property and casualty insurance is therefore part of our daily lives and can be taken out for any type of need: home, professional, car, etc. Remember to always remain vigilant about the protections and the limits of the guarantees included in your contract.

By Master James

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