- A destructive event, such as an earthquake, hurricane, or flood, that poses a risk of a substantial loss. Some insurers do not provide coverage for catastrophe hazards in their umbrella coverage policies due to the large levels of risk, thus requiring individuals to purchase separate catastrophe insurance policies.
extraordinary natural force, generally uninsurable
Related Terms and Acronyms
- Act of God (AOG) — Acronym,
- When used in insurance policies, an event caused by natural forces such as hail, rain, tornado, lightning, floods or earthquakes, which results in damage to property.
- Catastrophe Insurance — Definition,
- Insurance that covers losses due to catastrophe hazards such as hurricanes, earthquakes and terrorist attacks.
- Extended Replacement Cost — Definition,
- A replacement cost for an asset that exceeds that of the actual cash value of the asset.
- Hazard Insurance — Definition,
- Insurance that covers hazards that are considered risky enough not to be covered by a standard insurance policy.
- Hurricane Deductible — Definition,
- The payment a policyholder must make to their insurance company before receiving benefits after a hurricane.
- Insurance Cycle — Definition,
- A cycle of soft and hard market conditions observed in the insurance and underwriting industry.
- Named Perils Insurance Policy — Definition,
- Insurance that only provides coverage in the event of a loss from a peril specifically named in the insurance policy.