What does a Catastrophe Savings Account cover?

A Catastrophe Savings Account is designed to help individuals set aside funds specifically for expenses arising from catastrophic events. This includes costs that may not be covered fully by insurance, such as deductibles and any uninsured portions of losses. Therefore, the account can be a crucial financial safety net for policyholders facing significant out-of-pocket expenses when disaster strikes.

While the other options may represent important financial aspects related to natural disasters, they do not accurately reflect the primary purpose of a Catastrophe Savings Account. For instance, insurance premiums for windstorm damage and mortgage payments during a catastrophe do not directly relate to the specific use of saved funds from such accounts. Home repairs after a natural disaster, though relevant, suggest a more general use of funds rather than the targeted assistance provided by these accounts in addressing deductibles and uninsured losses.