What is catastrophic coverage?

Catastrophic coverage refers to a type of insurance designed to offer financial protection against severe and unexpected events that can cause significant financial loss. This type of coverage generally applies to situations that are beyond the scope of standard insurance policies, responding specifically to major incidents such as natural disasters, severe accidents, or significant health issues that incur high costs.

By providing coverage for these extreme scenarios, catastrophic insurance helps individuals and businesses manage the risks associated with unpredictable and large-scale losses. This ensures that policyholders are not left vulnerable financially when facing disasters that can be catastrophic in nature.

In contrast, the other options focus on more routine situations or specific types of coverage, none of which align with the fundamental purpose of catastrophic coverage, which is to guard against severe financial burden resulting from unexpected catastrophic events.