Catastrophic coverage is a form of insurance which is specifically designed to cover catastrophes. There are several different types of thi coverage available; many are designed to supplement existing insurance coverage, ensuring that someone is covered in the event of a fire, flood, earthquake, tornado, or major accident. There is also a form of catastrophic coverage which is designed to deal with health emergencies.
Home owners may purchase catastrophic coverage as a separate policy to supplement an existing insurance policy. For example, many home insurance plans do not offer benefits in the event of an earthquake, especially in earthquake-prone regions, because the risk from the insurer's point of view is too high. Homeowners who want to be covered can purchase a separate catastrophe policy which specifically covers earthquakes. Business owners may also take advantage of this type of policy so that they are prepared for catastrophic events.
In the health insurance realm, catastrophic coverage typically has a very high deductible and a low premium. It is designed to help people pay for major accidents and extensive medical care. The costs of prolonged or emergency treatment can get quite high, and catastrophic coverage can ensure that someone does not go bankrupt dealing with medical bills. While the deductible can be very high, many people view catastrophic health insurance coverage as a good investment, because paying for such medical treatment outright can be very costly.
The best candidates for catastrophic health insurance are those who have no health insurance. These individuals will still have to pay for things like routine visits, medications, and so forth, but they can be assured that they will be provided for in the event of a major illness or accident. Many people who are generally healthy choose to go without health insurance for various reasons; catastrophic coverage can be an excellent idea for these individuals.
Not all catastrophic coverage is the same, and it is a good idea to read the terms of a plan carefully to make sure that you understand it. If you are dealing with an insurance agent, ask the agent about hypothetical situations to determine whether or not they will be covered, and do not be afraid to ask for a full explanation of confusing terms in the plan. Think carefully about the kinds of events which you may be faced with, and make sure that you know about all of the exclusions in the insurance coverage before you buy.
