Catastrophic Claims Causing Insurance Rate Increases

It seems that almost weekly we are hit weekly with news of a tropical storm, wildfire or earthquake that is causing damage across the country. Catastrophic losses or “Cat losses” as we say in the business are to be expected to some degree and baked into most insurance rates. However, when cat claims get to be as significant as they have been in the past few years, reinsurance companies are forced to increase rates…

Reinsurance is essentially insurance for insurers. Carriers buy reinsurance as a stop loss to their large claim events. Many people don’t even know this system is in place, but it is an essential part of how our industry plans for and charges for rates. Because of the California wildfires and East Coast hurricanes, reinsurance carriers have taken losses that are forcing them to increase their rates for the insurance companies you and I buy from. Rates have been low for many years but are starting to rise. This is especially true for property rates and auto rates. Besides the cat losses mentioned, auto claims are getting out of control due to distracted drivers and the expensive technology going into new vehicles. Commercial auto rates are being hit particularly hard.

This is bad news for the food truck industry that has already, for many years, been perceived as a bad risk by insurance carriers. The number of insurance carriers willing to insure food trucks is going down and the rates of those that can are going up. What does this mean for you? Good news for gourmet food trucks is our program is still going strong. We have been forces to increase rates on auto, but remain competitive on pricing especially when it comes to coverage specifically designed for you! As most companies try to weather the storm of reinsurance rate increases and fickle auto underwriting, we are still going strong as the market leader for food truck insurance.

If you have any questions about food truck insurance, industry related questions, or otherwise, please feel free to reach out or leave a comment!