What type of insurance protects against events like earthquakes or floods?

The correct choice involves specialized or supplemental insurance policies, which are specifically designed to cover certain risks that are not included in standard property insurance. Events such as earthquakes and floods are typically excluded from basic property insurance policies due to their high potential for loss and the unique nature of these natural disasters.

Standard property insurance generally protects against perils like fire, theft, and vandalism. However, for certain catastrophic events like earthquakes and floods, insurers offer separate policies or endorsements that provide the necessary coverage. By requiring policyholders to purchase these specialized policies, insurance companies can mitigate the financial risk associated with these high-impact events.

Specialized or supplemental insurance provides tailored coverage that takes into account the specific risks posed by natural disasters in certain geographical areas. This ensures that individuals and businesses can safeguard their assets against potential total loss from such significant occurrences.