What is the primary focus of catastrophic insurance?

The primary focus of catastrophic insurance is to provide protection against large, infrequent, and severe losses. This type of insurance is designed to cover substantial and often unexpected events that could result in significant financial ramifications for policyholders. Catastrophic events may include natural disasters, such as earthquakes or hurricanes, where the magnitude of the damage is so great that it overwhelms typical insurance policies that cover routine losses.

By focusing on these severe and uncommon events, catastrophic insurance plays a crucial role in helping individuals and organizations manage risks that could otherwise lead to devastating financial consequences. It allows insured parties to recover from major incidents without facing crippling debts or financial ruin. The other options, while they address various aspects of insurance needs, do not capture the essence of catastrophic insurance, which is specifically tailored to mitigate the risks associated with extreme, costly events.