What type of disasters does catastrophe coverage often include?

• A. Household accidents
• B. Fires and theft
• C. Floods and earthquakes
• D. Vehicle collisions

Answer: (C)

Catastrophe coverage is specifically designed to protect against large-scale disasters that can cause significant damage and loss. This type of coverage typically includes natural disasters such as floods and earthquakes, which are often excluded from standard homeowners insurance policies.

Floods can cause widespread damage to homes and infrastructure, while earthquakes can lead to structural failures and devastation. Because these events are often large-scale and can occur without warning, having specific catastrophe coverage for them is crucial for financial protection.

Other types of incidents, like household accidents, fires, theft, and vehicle collisions, do not usually fall under catastrophe coverage as they are typically covered by standard insurance policies. These types of events do not usually meet the criteria of being a catastrophic event that results in extensive damage across large areas or to multiple properties.