Whether you're filing a crop insurance claim or a homeowners insurance claim, you've got your insurance company behind you. But do you ever wonder how the companies are able to pay out so many expensive claims? Think about how much money they had to dish out after big storms like Superstorm Sandy! Here's their little secret: they have insurance, too.
Reinsurance is when an insurance company buys insurance for itself. It's a method used for distributing the risk. In the event of a huge insurance event, the insurance company is able to pay the claims without going bankrupt. Since reinsurance is for insurance companies, this is not something you would ever have to purchase for yourself. You will also probably have no idea if your insurance company is reinsured because there should never really be a time that you have to deal with the reinsurer. The reinsurer’s primary relationship is with the insurance company it is covering. It really has nothing to do with your specific policy. When you file a claim, you will only need to deal with your insurance company. If your company needs extra money, it will need to speak with the reinsurer.
Believe it or not, some reinsurance companies also get their own insurance, and this is called retrocession insurance. It can get a little confusing sometimes for all of these companies, but luckily, you shouldn't have to deal with them at all.
Are you trying to deal with a denied insurance claim? Contact a Houston insurance claim attorney at The Voss Law Firm, P.C. today for a free consultation at 888-614-7730.