Definition of "Catastrophe hazard"
Eloa P. (Kay) Gray, Real Estate Agent
Residential Plus Real Estate Services
Circumstance under which there is a significant deviation of the actual aggregate losses from the expected aggregate losses. For example, a hurricane is a hazard that is catastrophic in nature, since whole units or blocks of businesses may be threatened. Catastrophic hazards often cannot or will not be insured by commercial insurance companies either because the hazard is too great or because the actuarial premium is prohibitive. Where a void exists in the marketplace, a government agency may subsidize the coverage with such programs as federal flood insurance and serviceman's GROUP LIFE INSURANCE (SGLl).
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