Reinsurance

Reinsurance is essentially insurance for insurance companies. In the market, it plays a massive role in setting your monthly premium. When global reinsurance rates spike due to major climate disasters, your local carrier’s costs go up, and they pass those increases to you. Reinsurance allows carriers to remain solvent after a catastrophic event, but the volatility in this “back-end” market is a primary driver behind the double-digit rate hikes seen in many states.