Major catastrophes have a direct impact only in the areas where they occur

Major catastrophes have a direct impact only in the areas where they occur. Elsewhere, they may have an indirect effect. Here's how it works:

• Insurers also buy insurance. Just like you, your insurance provider buys insurance to help cover unusually big losses that it couldn't handle on its own. The insurance that insurers buy is called "reinsurance."
• Reinsurance companies operate all over the world and pay when there is a major disaster, such as Hurricane Katrina. If, based on experience, reinsurers predict a year with exceptionally high losses, they may raise their rates.
• When reinsurers raise rates, insurance companies here in Canada may have to pay more for their reinsurance and that, in turn, could affect the premiums that you pay.

The most important factors affecting your home insurance rates are local risk factors such as where your home is located, how much it would cost to rebuild it, how it's heated, etc. Your claims history is also important. For more information on what providers of homeowner's insurance