An admitted insurance company has met regulations set by a state’s department of insurance (DOI), whereas a non-admitted insurance company has not met those requirements.
An admitted insurance company is backed by the state, which means:
A non-admitted insurance company isn’t approved by the state, which means:
There are situations when both admitted and non-admitted insurance coverage may be beneficial for business owners, depending on the types of insurance needed.
An admitted insurer, also called a standard market carrier, is an insurance company that has been approved by a state’s department of insurance.
For business owners, buying from admitted companies means three things:
Non-admitted insurers, also known as excess and surplus lines carriers, sell policies that aren’t backed by your state. While they don’t fall under traditional insurance regulations, many states do regulate non-admitted carriers.
These regulations are usually less strict than those followed by admitted insurers. As a result, non-admitted insurers have more flexibility when it comes to:
This typically means they can write complicated or hard-to-place specific risks that the standard insurance market won’t cover. For example, if you own manufacturing business that has a facility located along the Gulf Coast, or in an area known for brush fires, it may be difficult to find an admitted insurer to cover property damage from a hurricane or wildfire, respectively.
Similarly, many contractors in New York have to obtain liability insurance policies through non-admitted insurance companies due to the high risk of construction-related lawsuits in the state.
In addition to admitted and non-admitted status, insurance companies are given letter grades from A++ to F, from best in class to worst. These grades are calculated by the credit rating firm A.M. Best, which has been rating insurance companies since 1906.
A non-admitted insurance company with a high grade is most likely a solid bet for your insurance needs, while an admitted carrier with a C rating or below could be risky.
Insureon works only with top-rated admitted and non-admitted carriers to help business owners find the appropriate coverage at affordable rates.
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