Admitted and Non-Admitted Insurance Carriers—What’s the Difference?

Looking at your coverage recommendations, your clients may not know the difference between admitted and non-admitted insurance carriers, and the benefits and drawbacks to each. Here’s a brief explanation you can use to help them understand the difference.

If someone needs insurance for a situation that’s considered “high-risk,” they may be provided with some non-admitted carrier options, since admitted isn’t an option. In the insurance industry, the term “admitted” refers to an insurance carrier that has the official backing of a state’s insurance department. Alternatively, a “non-admitted” carrier hasn’t been approved by the state and doesn’t have its backing. Additionally, it isn’t subject to the same rules as an admitted carrier. Some insurance companies may be admitted in one state but not in another. 

An admitted insurance carrier must comply with all of the state’s department of insurance regulations. Also, should the insurance carrier face financial hardship, the state will cover the claims on behalf of the insurance carrier up to a certain amount. 

As for non-admitted carriers, they’re not under the state’s department of insurance regulations and don’t have to follow rates established by the states. This allows them to offer more options in coverage and more flexible pricing. But unfortunately, due to the absence of the state’s backing, there’s no guarantee that claims will be covered should they face financial insolvency. Finding a highly-rated carrier with a good reputation is extremely important. 

While admitted and non-admitted carriers may follow different guidelines, there’s no distinct difference in their quality. However, it does impact the types of insurance they can offer. Keep reading to learn what sets the two apart.

Quaker Special Risk offers a wide array of both admitted and non-admitted insurance solutions to meet your clients’ needs. We have established and long-lasting relationships with numerous A-rated carriers. Contact us to explore options for covering the typical as well as rare and high-risk situations.