What is the Definition of Catastrophe Deductible?
A percentage or dollar amount that a homeowner must pay before the insurance policy kicks in when a major natural disaster occurs. These large deductibles limit an insurer’s potential losses in such cases, allowing it to insure more property. A property insurer may not be able to buy reinsurance to protect its own bottom line unless it keeps its potential maximum losses under a certain level.
Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/
Label: Insurance
Theme: Dictionary of Insurance Terms
Other Questions: What is the definition of Insurance?
What is the Definition of Catastrophe Deductible?
Check out other definition of insurance terms below:
What is the Meaning of EXTENDED COVERAGE In Insurance Terms?
An endorsement added to an insurance policy, or clause within a policy, that provides additional coverage for risks other than those in a basic policy.
What is the Meaning of EXTENDED REPLACEMENT COST COVERAGE In Insurance Terms?
Pays a certain amount above the policy limit to replace a damaged home, generally 120 percent or 125 percent. Similar to a guaranteed replacement cost policy, which has no percentage limits. Most homeowner policy limits track inflation in building costs. Guaranteed and extended replacement cost policies are designed to protect the policyholder after a major disaster when the high demand for building contractors and materials can push up the normal cost of reconstruction. (See Guaranteed replacement cost coverage)
What is the Meaning of FACE AMOUNT In Insurance Terms?
For a fixed-amount whole life insurance policy, the amount of the death benefit payable if the insured person dies while the policy is in force.
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