What type of insurance is CAT coverage classified as?

CAT coverage, or Catastrophic Risk Protection, is classified as federal insurance. This type of insurance is part of the federal crop insurance program, which is designed to provide minimal protection to farmers against crop losses due to natural disasters or price declines. Since it is established and regulated by the federal government, it offers a fundamental level of coverage at a lower premium cost compared to more comprehensive insurance options.

Federal crop insurance, including CAT coverage, is essential for stabilizing farmers' incomes and ensuring their sustainability during adverse economic or environmental conditions. By offering federally subsidized insurance, the government helps to mitigate the financial risks farmers face, ultimately aiming to maintain the agricultural sector's health and viability.

Other types of insurance—such as private, state, or supplemental insurance—do not align with the specific characteristics and provisions associated with CAT coverage, which is distinctly a federal offering designed to address catastrophic events impacting crop production.