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.

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What Makes an Admitted Insurance Carrier?

Short answer: An admitted insurance carrier is backed by the state and must follow state regulations. A non-admitted insurance company is not supported by the state and thus does not have to follow certain regulations.

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Long answer:

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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.