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Catastrophic coverage is a specific type of insurance policy that is designed specifically with the intent to cover a catastrophe.

There are many types of catastrophic insurance coverage and this coverage is used as a supplement to the regular insurance coverage in instances; such as:

• Fire
• Earthquake
• Flood
• Tornado
• Major accident

These are good amendments to look into on your regular homeowner’s insurance policy; however, today we’re going to cover homeowners quickly and spend the most time on health insurance.

Homeowners

The homeowner can purchase the catastrophic coverage of any of the types listed above as an individual policy that is used to supplement the existing homeowner’s policy.

The reason that this is done is there are many types of catastrophic losses that are going to be directly excluded from the normal homeowner’s insurance plan so it’s necessary to purchase the supplemental coverage. For instance, if you live in a high probability area of wildfires; such as, certain areas of California you’re not going to be able to get that fire coverage under a normal homeowner’s policy.

You should think about the possibilities and probabilities and speak with your insurance agent or broker about the coverage available and make a determination on what you should add to your policy while keeping in mind that each coverage addition will relate in your bottom line premium dollar amount.

One quick note that there is commercial catastrophic insurance coverage available to prepare for an event just like the homeowner would; should you be interested in this coverage you should consult with your commercial insurance agent or broker.

Deductibles

Moving to health insurance the coverage is going to normally have a quite steep deductible amount with a lower premium payment. Basically the way it is intended to work is that it will help those insured’s in the event there is a major accident or very extensive medical care needed.

The cost of any long term treatment can get into the tens of thousands of dollars and having a catastrophic insurance coverage will most likely save pretty much anyone from having to go into bankruptcy.

Even if you don’t have or want regular health insurance it is a good peace of mind insurance so you don’t have to pay out of pocket should the worst happen and also it just make sound financial sense.

Best Candidates

The person that would be the best to purchase a catastrophic health insurance plan would be someone that doesn’t have any current health insurance. These are those people that will still pay for things like:

• Regular visits or checkups
• Medications
• So on…

By purchasing the catastrophic coverage though they can have the peace of mind that should something happen either by an accident or a major sickness they will have coverage.  There are a lot of those that are healthy and make a determination they don’t need health insurance. Should something major happen you’re unlikely to be able to afford all of the incurring hospital bills and related costs. In this instance even should you choose to go without regular health insurance the purchase of a catastrophic coverage policy would be an ideal.

Differences

The one thing that you need to keep in mind is that not all of the catastrophic coverage is going to be equal. It is a wise decision to make sure that you read all of the terms of the policy to make sure that you understand it.

You’ll also need to take some time out and think about the different kinds of events could occur that would lead to a potential loss and find out what is covered and what would be excluded in the policy before you purchase it.

Whether you’re dealing with an insurance agent or insurance broker you should ask them theoretical situations in order to make sure your potential losses would be covered. Ask questions until you fully understand, that is their job. If your agent or broker isn’t willing or able to answer the questions you pose to them it’s time to find someone else.