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Understanding Insurance Basics
Property and Casualty (General) Insurance
Property insurance can provide coverage for loss or damage to:
- your home or personal possessions
- your car
- your business.
Casualty insurance can provide coverage against legal liability for losses caused by:
- injury to other people
- damage to the property of others.
Property and casualty insurance is also known as general insurance. Here is a list of some key terms that you may encounter as you look into property and casualty insurance.
Term |
Definition |
|---|---|
Actual cash value |
The cost of the insured item when it was new, minus depreciation (loss of value due to the age and condition of the item). This is one method of determining the amount of money the insurer will reimburse you if you make a claim. How the depreciation is calculated depends on the item insured and the insurance company. Premiums for policies with actual cash value are generally less expensive than those for policies with replacement value. |
Replacement value |
The actual cost to replace an item destroyed or damaged in the event of a covered loss. This is another method of determining the amount of money the insurer will reimburse you if you make a claim. Premiums for policies with replacement value are generally more expensive than those for policies with actual cash value. |
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