What’s the difference between an Admitted and Non-admitted insurance company?

Admitted Insurance Companies
In California these are companies that are licensed with the state and must file and have rate changes approved by the Department of Insurance. Admitted companies are considered “standard” insurance companies, and they specialize in low-medium risk insurance. Unless you have several tickets and accidents, or have a high risk home, you’re probably insured by one of these standard companies. Because they’re licensed with the state, they participate in the State Guarantee Fund, which provides consumers with protection if their insurance company becomes insolvent or goes bankrupt.

Non-Admitted Insurance Companies
In California these are insurance companies that do business in the state, but aren’t licensed with the state. They’re considered “surplus lines” insurance companies, and are meant to provide coverage for harder to place or more specialized policies that the standard market can’t. Non-admitted companies typically offer more flexible policies and pricing because their rates and language don’t need to be approved by the Department of Insurance. Because they’re not licensed with the state, policy holders get no added protection from the State Guarantee Fund if the insurance company becomes insolvent.

The most important aspect to consider when choosing a policy between the two, is the financial strength of the company. An “A” rated Non-Admitted company is a much lower threat of bankruptcy than a “B” rated Admitted company, and their financial strength has nothing to do with whether they’re licensed in the state.


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