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This type of insurance protects you from the loss of your belongings, such as your house and its contents, your car, and any other physical assets you may have. Many property and casualty policies also contain a liability component, so that, for example, if someone slips on the ice and breaks a leg on your front steps, your insurance will pay.

Your insurance company will have standards as to how much insurance they will provide based on their assessed market value of your assets. You should ensure, though, that what will be paid out in insurance will at least cover any debt secured by that asset. For example, let’s say you have a car on which you are making monthly payments. The insured value of the car is $6,000 but you still owe $7,500 on it. If the car is totaled, the financing company will immediately call the loan and you will have to dig up the excess $1,500 from somewhere to cover it.

When assessing whether your belongings are adequately covered by property and casualty insurance, make sure that you have considered any special collections you might own, such as stamps, art, hockey cards, or antiques. These types of assets are generally not covered under the standard policy and you may have to take out a special rider on them.