In most states there are "admitted" insurance companies and "non-admitted". The location of administrative or processing offices have nothing to do with the status, however the regulations they are subject to can greatly affect costs. An uninformed consumer (by consumer I am not just talking about insuring a Honda civic, in that market I doubt you could even use a non-admitted insurance company) would never want to use a "non-admitted" carrier, but an informed consumer could save a ton of money in the "non-admitted" market. One important question for insurance across state lines would be for minimum federal standards for any health insurance company, where states could further enhance regulations for the state's needs. Here is a definition from the web on "admitted" v. "non-admitted":
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Carriers are "admitted" by the state insurance department of each state. This means they are subject to the state's rules, regulations, and overviews.
From an insured's point of view, an "admitted" carrier means that if you think the company has treated you unfairly, or cancelled your policy unjustly, you can submit a complaint to your state insurance department and have them review it, and possibly remedy the problem. A "non-admitted" carrier is NOT subject to your state regulations, AND you will also have to pay a "surplus lines tax" and "stamping fee" on your policy - these vary from state to state, but usually total around 4% of the policy premium or less. You would ALSO usually have to pay an inspection fee for the policy - and you might or might not have an inspector come out to review your property and/or operations.
Non-admitted carriers have more flexibility with both policy terms and pricing, so there are coverages that you can get through a non-admitted company that you can't find through an admitted company. If you're considering purchasing a policy through a non-admitted carrier, be SURE you know what the current "A.M. Best" rating is for the carrier - and if it's not at LEAST B++, do not buy the policy. You can find ratings at A.M. Best Company, or through the agent offering the policy.
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It is basic but accurate.
Insurance Question...What is an admitted or non-admitted carrier? - Yahoo! Answers
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Last edited by aceventura3; 11-06-2009 at 08:50 AM..
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