Understanding Catastrophic Event Property Deductibles
Published by Jennifer Walker on Sep 19, 2018
A catastrophic event property deductible (“CAT deductible”) differs from a traditional property insurance deductible. CAT deductibles are a significantly higher out-of-pocket expense to the policyholder and apply to specific perils (e.g. named storm, hurricane, flood and earthquake) rather than to all perils. The appearance of CAT deductibles emerged as a way for insurers to offer property insurance in high catastrophic risk areas while keeping the coverage affordable, although policyholders will likely disagree on this point.