Quote:
Originally Posted by NJRICHARD
What happens to all the money they collect when there are no storms. They have one storm and all of a sudden, they have to raise all our rates? At times they don't have storms for years and years and still collect money every year?.....where does all this money go?
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The insurance companies the public deals with lay off the highest part of the risk with reinsurance companies. These premiums are paid every year. If there are no bad storms then the reserves at the reinsurance companies build up so that, in years that there are bad storms, they have sufficient assets to pay out on the reinsurance, so the company through which you are insured has the funds to pay for your damage,