Like auto insurance, homeowners insurance is a "package" policy, providing both property and personal liability insurance. The typical policy covers the house, garage and other structures on the property -- as well as personal property inside the house -- against a wide variety of perils, such as fire, windstorm, vandalism and accidental water damage.

The typical homeowners policy includes theft coverage on personal property anywhere in the world and liability for accidental harm caused to others. It also reimburses the policyholder for the additional cost of living elsewhere while his or her house is being repaired or rebuilt after a fire or other disaster.

Earthquake damage and floor damage caused by external flooding aren't covered by standard homeowners policies, but coverage can be purchased separately.

Workers compensation insurance, which is the largest of the commercial lines segments, provides for the cost of medical care and rehabilitation for injured workers. It also provides for lost wages, and for death benefits for the dependents of persons killed in work-related accidents.

General liability insurance covers the liability risks of a business arising from injuries or property damage that is caused by its products, completed jobs, premises and operations, elevators and independent contractors.

Commercial multiple peril insurance is a package policy that includes property, boiler and machinery, crime and general liability coverages.

Farmowners multiple peril insurance, similar to homeowners insurance, protects farmowners and ranchowners against a number of named perils and liabilities. It covers a dwelling and its contents, as well as barns, stables and other structures.

Fire insurance provides coverage against losses caused by fire and lightning. It is usually sold as part of a package policy such as commercial multiple peril.

Surety bonds provide monetary compensation in the event that a policyholder fails to perform certain acts such as the proper fulfillment of a construction contract within a stated period. Surety bonds are usually purchased by the party which has contracted to complete a project. They are required for public projects in, order to protect taxpayers. Fidelity bonds, which are usually purchased by an employer, protect against losses caused by employee fraud or dishonesty.

One very important kind of P/C insurance for Iowa is crop insurance. These are two kinds of crop insurance: crop-hail, which is provided by the private market and covers just hail, fire and wind; and federally sponsored all-risk (multiple peril), which is sold and serviced by the private market but subsidized and reinsured by the federal government. (Courtesy of Insurance Information Institute, Fact Book 2002)

As can be imagined, without P/C insurance, our society could not handle risk and would simply shut down.

CONTRIBUTION OF P/C COMPANIES TO THE U.S. ECONOMY

Not only do property/casualty companies provide an indispensable product, but they play a vital role in our national economy.

The insurance industry directly employs 2.3 million people in 2005 with 670 thousand employed by the property casualty companies, 836 thousand employed by life and health companies, and 592 thousand employed as agents and brokers. Other service industries directly related to insurance employed 204 thousand. Payroll for these employees amounted to $108 billion.

In 2005, total assets of property casualty companies amounted to approximately $1.2 trillion, with cash and invested assets of $958 billion. Over $600 billion of U. S. government bonds were held by the insurance industry of which the property casualty industry held almost $200 billion, and the life industry over $400 billion. Property casualty insurers owned over $174 billion out of $193 billion in state and local bonds held by the insurance industry.

The industry's contribution to states economies in addition to employment is also substantial. The insurance industry paid more than $10 billion in premium taxes in 2001. The insurance industry also contributed from 1 to 7 percent of the states' gross state product.

Finally, household expenditures for insurance in 1998 was only 6.1 percent. Expenditures for auto insurance amounted to only 2.1 percent of all expenditures and only 0.6 percent of all expenditures for homeowners insurance. (Courtesy of Alliance of American Insurers)