YOU ASK:
What is the definition of Catastrophe Factor?
WE ANSWER:
The Catastrophe Factor refers to the possibility or the probability of losses due to a catastrophe. The factor is based on the historical experience with catastrophes and looks into the total number of such catastrophes in a specific location (such as a state) within the last 4 decades. The catastrophe factor is important in calculating for the premiums of property insurance.
There are some that look at the catastrophe factor only within 2 decades. This really depends on the insurance company and how the actuarial team computes for the insurance premiums.
These catastrophes (depending on the definition stated in the insurance contract) may include hail, riots, explosions, fire, earthquakes and windstorms.
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More insurance terms around catastrophe factor:
- Catastrophe Model
- Catastrophe Reinsurance
- Cell Phone Insurance
- Chartered Financial Consultant (ChFC)
- Chartered Life Underwriter (CLU)
- Chartered Property/Casualty Underwriter (CPCU)
- Claims Made Policy
- COBRA
- Coinsurance
- Collateral
- Catastrophe Deductible
- Catastrophe Bonds
- Catastrophe
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- Cash Surrender Value
- Cash Payment Option
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