YOU ASK:
What is the definition of Catastrophe Deductible?
WE ANSWER:
The Catastrophe deductible is an amount or percentage that the homeowner must pay before he is able to receive claim payments because of a major natural disaster. Deductibles, which are usually large, enable the insurance company to accept more applications for property insurance, since it limits its potential losses. This is applicable for losses incurred due to a covered catastrophe.
The catastrophe deductible is also called the wind deductible.
The insurance company needs the deductible since it can only reinsure when it is able to keep the potential maximum losses at a certain level.
The amount and percentage of deductible vary from one insurance company to another.
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