Which term describes catastrophic events such as wildfires that affect many insured properties?

• A. Aggregation
• B. Capacity Limitations
• C. Title Insurance
• D. CAT/Natural Disasters (Wildfire)

Answer: (D)

Catastrophe risk describes events like wildfires that affect many insured properties. A CAT event is a natural disaster or similar widespread incident that triggers a surge of claims across a region, not just a single property. This term captures the scale and geographic reach of losses, which is exactly what happens when wildfires or other large-scale disasters strike. Aggregation refers to the buildup of risk within a portfolio, capacity limitations are about how much risk an insurer can bear, and title insurance covers issues with ownership titles—none of these describe the widespread nature of losses from a single catastrophic event.