Personal Catastrophe Insurance

What Does Personal Catastrophe Insurance Mean?

Personal catastrophe insurance is an extension to an existing policy that covers property or vehicular liability. It protects the policyholder from expensive damages in tort that could potentially lead to significant financial loss.

Insuranceopedia Explains Personal Catastrophe Insurance

This policy serves as a protective barrier against unexpected financial events, where the costs far exceed the coverage provided by primary property or vehicular liability insurance. Many drivers carry only state-minimum auto liability, and that is the same gap that pushes people to question whether their liability car insurance is enough to cover a worst-case lawsuit.

Personal catastrophe insurance offers valuable protection when someone is seriously injured on the insured’s property and is awarded substantial damages. It is also helpful when the courts impose an unexpected financial obligation on the insured that they cannot afford. Since the catastrophe policy only pays after the underlying home or auto policy is tapped out, the limits on those base policies are worth looking at when you compare the best homeowners insurance companies.