First-Party Property Insurance
Perils
Third-Party Liability Insurance
California Law
“‘Property insurance,’” our Supreme Court has explained, is a contract “‘in which the insurer agrees to indemnify the insured in the event that the insured property suffers a covered loss.’” (Garvey v. State Farm Fire & Casualty Co. (1989) 48 Cal.3d 395, 406 (Garvey), italics added.) “‘Coverage, in turn, is commonly provided by reference to causation, e.g., “loss caused by ...” certain enumerated perils.’” (Ibid.) In contrast, “the right to coverage in the third-party liability insurance context draws on traditional tort concepts of fault, proximate cause and duty.” (Id. at p. 407.) Thus, while first-party property insurance covers losses directly suffered by the insured’s property, third-party liability insurance provides coverage for losses suffered by other persons for which the insured may be legally responsible. (Croskey et al., Cal. Prac. Guide: Insurance Litigation (The Rutter Group 2025) ¶6:1; Garvey, at p. 407.)
(…) (See Garvey, supra, 48 Cal.3d at p. 406 [“‘The term “perils” in traditional property insurance parlance refers to fortuitous, active, physical forces such as lightning, wind, and explosion, which bring about the loss.’”].)
Secondary Sources: Croskey et al., Cal. Prac. Guide: Insurance Litigation (The Rutter Group 2025).
(California Court of Appeal, Dec. 5, 2025, California Fair Plan Association v. Lara, as Insurance Commissioner, Docket No. B336043, Certified for Publication)
