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.