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Insurance Definition: CATASTROPHE DEDUCTIBLE

By Compuquotes Team on March 27th, 2008

CATASTROPHE DEDUCTIBLE:

Definition:

  • A percentage or dollar amount that a homeowner must pay before the insurance policy kicks in when a major natural disaster occurs. These large deductibles limit an insurer's potential losses in such cases, allowing it to insure more property. A property insurer may not be able to buy reinsurance to protect its own bottom line unless it keeps its potential maximum losses under a certain level.

Information provided by Insurance Information Institute

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