What Are Admitted vs. Non-Admitted Insurance Carriers?

I find myself answering this question several times a week to explain to clients and prospects the difference between Admitted & Non-Admitted Insurance Carriers. In the world of insurance, there are two types of carriers: admitted and non-admitted. Both are important players in the insurance market, but they differ in several significant ways. In this blog post, we will explore the differences between admitted and non-admitted insurance carriers and their importance in the insurance industry.

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Admitted Insurance Carriers

Admitted insurance carriers are insurance companies that are licensed by the state's insurance department to write insurance policies in that state. They comply with state insurance regulations, including minimum capital and surplus requirements. Admitted carriers offer insurance policies that are standardized and approved by the state. These carriers are regulated by the state and must follow specific guidelines, including the rates they charge for their policies.

One of the most significant advantages of working with an admitted insurance carrier is that they provide policyholders with greater protection. If an admitted carrier were to go bankrupt or become insolvent, state guaranty funds would protect the policyholders. This means that policyholders are more likely to receive their claim payments if their insurance company fails.

Non-Admitted Insurance Carriers

Non-admitted insurance carriers, on the other hand, are not licensed by the state's insurance department to sell insurance policies in that state. They do not have to follow the state's insurance regulations, and they are not backed by the state guaranty funds. Non-admitted carriers can provide insurance policies that are unique, tailored to the specific needs of the policyholder, and not available through admitted carriers.

Non-admitted carriers are also known as surplus lines carriers. These carriers specialize in high-risk insurance policies, such as professional liability, environmental liability, and excess liability insurance. They are typically used by businesses that cannot obtain coverage through an admitted carrier due to the nature of their business or the level of risk they present.

Non-admitted carriers charge higher rates than admitted carriers because they are not subject to state regulation. However, they also offer coverage that may not be available through admitted carriers. Non-admitted carriers are often used as a last resort when policyholders cannot find coverage elsewhere.
Admitted vs. Non-Admitted Insurance Carriers: Which Is Better?

The answer to this question depends on your specific insurance needs. If you are looking for standard insurance coverage, an admitted carrier is likely the best choice for you. Admitted carriers are regulated by the state, provide policyholders with greater protection, and offer standardized policies.
If you are in a high-risk industry or need coverage that is not available through an admitted carrier, a non-admitted carrier may be the only option. For many Homeowners on the South Carolina Coast these Non-Admitted carriers may be the only option in some cases.  Non-admitted carriers provide coverage that is unique and tailored to the specific needs of the policyholder. However, non-admitted carriers are not backed by state guaranty funds, which means that policyholders are not protected if the carrier fails.

Conclusion

Admitted and non-admitted insurance carriers play important roles in the insurance industry. Admitted carriers provide standardized policies, are regulated by the state, and offer greater protection to policyholders. Non-admitted carriers, on the other hand, provide unique policies tailored to the specific needs of the policyholder but are not regulated by the state and are not backed by state guaranty funds. When selecting an insurance carrier, it is important to consider your specific insurance needs and choose the carrier that provides the best coverage for your situation.

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Tyler Grizzle - Partner GSP Insurance Group
GSP Insurance Group serves clients in the states of SC, GA, NC, AL, FL, TN, OH, and IN

GSP Insurance Group Headquarters
8 Buckingham Plantation Dr
​Bluffton, SC 29910