The reinsurance market is very interesting in that there’s only a handful of them out there. It’s a global market. A lot of it is domiciled over in Europe and London over there. And so what they’ll do is back these insurance companies.

So, they’ll back Nationwide, State Farm, and Allstate after they’ve hit this threshold. And what they’ve said is, Hey, we know that there’s a great potential for these catastrophic losses, so we’re going to jack up our reinsurance costs, okay? That kind of goes downhill to the insurance company that we deal with.

Going back to Prop 103. Prop 103, in the legislation, specifically has language in there that says the insurance company, so State Farm, Allstate, AAA, whomever you want to name, even though they may be incurring the higher reinsurance cost, can’t pass that along to the consumer. So they have to eat that. So that, too, has been going on in the background, and that’s also pushed them out of the market to step back.

That’s interesting. So it’s politics, too.

It’s politics. And these other factors that the end consumer is not going to be aware of at all, are kind of playing together to increase the overall cost.

Tune in for Part 12 of the State of Fire Insurance in Tuolumne County, where Justin and Ryan discuss the Accuracy of Risk Assessment by Insurance Companies!

We’d be happy to review your insurance coverage options with you! Give us a call at (209) 532-5102 or visit https://caldwell-insurance.com.