Why do some members have a facultative reinsurance charge added to their annual assessment invoice?
Reinsurance is insurance the Society purchases to protect itself against large losses and catastrophic events. Facultative reinsurance allows the Society to insure individual homes either valued higher than what the Society would ordinarily insure or located in a geographic area in which the Society would not ordinarily insure because of inadequate fire protection equipment and/or personnel. The cost of facultative reinsurance is charged directly to the individual homeowner as an addition to their annual assessment and forwarded by the Society to the reinsurer. The Society receives no part of the facultative reinsurance premium nor does it receive any commission for placing this reinsurance. Without the use of facultative reinsurance about 4% of members would be unable to continue their homeowners insurance with the Society.
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