Reinsurance and retrocession insurance are two concepts vital to the insurance industry. Both types of insurance help to spread out risk and make sure that claims are paid even after large or unusual loss events, such as hurricanes, tornados, and wildfires. But how do reinsurance companies set premium rates and structure reinsurance and retrocession plans? One such type of property reinsurance is called spread loss reinsurance, also know as Carpenter plan insurance.
What is spread loss insurance?
Simply put, spread loss insurance is a type of property loss in which the insurance premium rate is adjusted periodically based on the losses experienced in the past—usually either a three-year history or a five-year history. Also known as the Carpenter plan, this form of retrospective rating has the advantage of calculating rates in consideration of recent inflation rates, changes in the economy, and consideration of recent loss events. Spread loss insurance also considers the possibility of expenses, unusual losses, a catastrophe, or unusual losses at the end of a period of insurance.
Texas commercial insurance claim law office
As you can see, the insurance industry is complex. There may be many reasons that your insurance claim is denied, delayed, or just plain inaccurate. If you are having difficulty with your property damage insurance claim, you may wish to speak with a Texas commercial claims insurance attorney about the details of your case. Our attorney can help make certain that you get the money you deserve to rebuild and continue business. To learn more about our legal services, call the Voss Law Firm today: 888-614-7730.