What is Insurance

What is Property & Casualty Insurance and Why do I need it? 

Property = your physical property and belongings

Casualty = liability: harm caused to a third party resulting in damage of person or property

What is Insurance

Property insurance is a financial safety net for your assets, like home(s), vehicles, personal belongings. If a loss or accident occur from storm, flood, fire insurance helps restore you to the same financial position prior to the loss. This is the principle of indemnity and it should be noted that insurance kicks in after a loss and does not cover maintenance or prevention. 

Law of Large Numbers

Your insurance premium is a small fraction of your assets. So how could your insurance pay a large claim? Well benefit of insurance is only paying a small, predictable amount to an insurance company, and in return, they promise to cover big, unexpected costs if something goes wrong. The more policies written the larger the funding pool grows to cover claims. Insurance It’s basically a way of sharing risk. Instead of one person taking on a huge financial loss alone, the cost is spread across many people through the insurance pool.

Why You Need It

Without insurance, one accident, lawsuit, or disaster could wipe out your savings or your business. Again, insurance protects and covers your assets. 

• Example: If you cause a car accident, medical bills and repairs could be hundreds of thousands of dollars—insurance covers those costs*.

Can you put a value on peace of mind? No but your insurance covers your property so, you can focus on your life or business knowing that if something unexpected happens, you won’t face the full cost alone.

Often Required by Law or Contracts

There are certain laws that require insurance. In Florida, the minimum insurance required by law for a vehicle is 10K/20K liability. If you have a mortgage, the agreement states you’ll carry insurance to cover the amount of the loan. And if you’re in a flood zone, they may require flood insurance as well. 

Businesses often required to show proof liability insurance to occupy a space for events to cover the customers that will come and go. Another contract that often requires insurance is a rental property where you operate day-to-day business, like an office or strip mall.

Helps You Stay Financially Stable

Instead of gambling with unpredictable risks, you pay a steady premium that you can plan for in your budget.

In short, insurance is protection—it’s about transferring the risk of a big, unexpected financial hit to an insurance company, so you can keep your life and finances stable.

How the state of Florida approves insurance carriers

In Florida, an insurance company must be admitted (licensed) by the Florida Office of Insurance Regulation before it can legally sell policies. To qualify, the insurance carrier must meet financial requirements, file an application, and submit detailed information about its leadership, business plans, policy forms, and rates. Regulators review this information to ensure the company is financially sound, its policies comply with Florida law, and its rates are fair. Once approved, the company receives a Certificate of Authority, which authorizes it to sell specific lines of insurance. Admitted carriers are then subject to ongoing regulation, financial reporting, and participation in guaranty funds that protect policyholders if the insurer fails.



To summarize the state has a rigorous process to vet out insurance carriers providing insurance to Floridians. 

Disclosure: The information provided is for general educational purposes only and may not apply to your specific policy, coverage, or insurance company. Always review your policy documents and consult directly with your insurance carrier or licensed agent for details about your unique situation.

*Insurance coverage applies only to approved losses as defined in your insurance policy. Exclusions, limitations, and deductibles may apply.