Admitted and Non-Admitted Insurance Carriers
Admitted insurance companies have received approval by the state's insurance department. By contrast, non-admitted insurance companies have not received state approval.
What Makes an Admitted Insurance Carrier?
By definition, admitted insurance companies:
- will be supported by the state to pay for claims in the event the insurance carrier fails financially
- must comply with regulations from the state's department of insurance
Non-admitted insurance companies:
- is not required to company with certain state insurance regulations
- will not be supported by the state in the event the insurance carrier fails financially
- cannot have cases appealed to the state insurance department (in the event that policyholders believe their claims were not handled properly)
Are Business Owners Better Off with Admitted or Non-Admitted Insurance Carriers?
While there are scenarios where each option may be better suited for a business owner, the decision boils down to a few key elements.
- The ability to appeal a claim to a state's insurance department
- The guarantee claims will be covered by the state in the event of financial ruin for the carrier
- Avoiding certain fees when purchasing a policy (as admitted carriers may not need to charge those expenses)
Non-Admitted carriers may cover claims for events that admitted carriers do not.