Catastrophe insurance

Catastrophe insurance is to protect businesses and residences against natural

disaster such as earthquakes, hailstorm, hurricanes, fires and floods and against man-made
disasters such as terrorist attacks and floods that can potentially cause severe losses to large
number of people or businesses. These low-probability, high cost events are generally excluded
from standard hazard insurance policies, and so catastrophic insurance is required.
Catastrophe insurance is different from other types of of insurane in that it is difficult to estimate
the total potential cost o n insured loss and a catastrophic event results in n exteremely lrge
number of claims being filed at the same time. This mkes it dificukt or ctastrophie insurance
issuers to effectively manage risk. Reinsurance and retrocession are used along with catstrophe
insurance to manage catastrophe risk.
Natural catastrophes (sometimes referred to as "nat cat") include:

hurricane (main peril is wind damage; some models can also include storm surge)

earthquake (main peril is ground shaking; some models can also include tsunami, fire
following earthquakes, and sprinkler leakage damage)

severe thunderstorm (main perils are tornado and hail)

flood

extratropical cyclone

wildfire

winter storm

Human catastrophes include:

terrorism events

warfare

Casualty/liability events

Displacement Crises

It is type of protection tht cosumer seek in order to cover them against serious medical
emergencies. People who enroll within a catastrophe insurane program realize that everybody
medicl costs like doctor check up or influenza vaccination are rarely covered under this type o
health plan, nd it is designed only to be implemente with lrge-scale medical problem that would
require ontinous care or extensive surgery.
The term catastrophe insurance can also apply to homeowners policies to allow additional
protection where nturl events like hurricanes or wildfires creat extensive damage. There are
several benefits of obtaining catastrophe insurance as a supplement or in a place o traditional
health insurance.