What's the difference between casualty insurance and disability insurance?

By Barry Higgins AAA
A:

Casualty insurance is often called "property casualty insurance", and it provides insurance protection for your property in the event of a covered loss. Property that is commonly covered with casualty insurance includes houses, condominiums, cars, motorcycles, boats, yachts and personal sports and recreation machines.

In the event of a loss resulting from a covered event named in the policy, casualty insurance is designed to repair or replace the property for the policyholder. Covered events may be auto accidents, acts of God (such as damage resulting from weather), vandalism and theft. These covered events are detailed in the policy and should be reviewed and understood when buying a casualty insurance policy. (Be sure to read Insurance Tips For Homeowners to learn more about the insurance policies available to protect your home.)

Disability insurance protects an individual's income in the event the insured becomes too ill to work, or is hurt and unable to earn an income. In the event of a disability, a portion of an individual's income is replaced through the benefits of the disability income policy. This helps reduce the financial impact a disability may have. (Learn how to translate this complicated type of insurance policy, in our related article The Disability Insurance Policy: Now In English.)

Companies offering disability insurance often limit the amount of coverage available to an individual - usually based on the individual's income. A disability income policy is designed to help reduce the financial impact of a disability, not to fully replace an individual's income.

This question was answered by Barry Higgins.

RELATED FAQS

  1. How does the grace period work on my Flexible Spending Account (FSA)?

    Learn how the grace period works on a flexible spending account so you can take full advantage of your annual pretax contributions.
  2. What are the pros and cons of life insurance policy loans?

    Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ...
  3. How can I borrow money from my life insurance policy?

    Capitalize on the cash value of your whole life insurance policy and learn the details of how to borrow money from your life ...
  4. What are the tax implications of a life insurance policy loan?

    Learn the instances in which you are required to pay taxes on a life insurance policy loan, so you can avoid making a costly ...
RELATED TERMS
  1. Noncancellable Insurance Policy

    A life or disability insurance policy that an insurance company ...
  2. Member Month

    The number of individuals participating in an insurance plan ...
  3. Pre-Existing Condition Exclusion Period

    A health insurance benefit provision that places limits on benefits ...
  4. Policy Or Sales Illustration

    An educational tool that shows a prospective or new insurance ...
  5. Point-of-Service Plan (POS)

    A type of managed-care health insurance plan that provides different ...
  6. Paid-Up Additional Insurance

    Additional whole life insurance that a policyholder purchases ...
Related Articles
  1. Here's how to incorporate life insurance into a plan to ensure that you and your family have the smoothest possible transition into retirement.
    Retirement

    The Smart Way To Use Life Insurance ...

  2. First time stock investors may ask, is there any way to buy insurance on stocks to prevent losses?
    Options & Futures

    Stock Safety: Top 3 Ways to Limit Your ...

  3. Investors can use derivative securities to effectively buy insurance on their individual holdings or on their portfolio as a whole.
    Options & Futures

    Can You Buy Stock Insurace? 3 Strategies ...

  4. Time to renew your health plan – or shop for a new one for 2015. Here's how to get the most from marketplace open enrollment for the Affordable Care Act.
    Insurance

    Health Open Enrollment: Read This Before ...

  5. Not sure how the Health Insurance Marketplace/Exchange works? Here are 5 ways to avoid frustration when enrolling through the federal or state exchanges.
    Insurance

    5 Ways To Ace 2015's Health Insurance ...

Trading Center