Admitted Vs. Non-Admitted Insurance: What's the Difference?

Posted on June 3, 2019

Insurance needs vary from person to person. Some insurance is required by law, such as car insurance. Other policies provide us with peace of mind.

When searching for an insurance policy, we're likely to come across two insurance carriers. These carriers are either admitted or non-admitted. When comparing admitted vs non-admitted insurance, we may wonder which is best.

We might also question the difference between the two. After all, we seek out insurance to provide us with security and protection. And, finding the right insurance company is vital to getting these needs met.

It's also important to have the right insurance agent in your corner. Someone who can guide you through the process and help you should any claims arise.

You also want to make sure that the company has a good track record of paying out claims. They should also have great customer service and financial stability.

So, how do you choose between admitted vs non-admitted insurance? It depends on your needs, the coverage you want, and your risk tolerance level. Read on to discover the major differences between admitted vs non-admitted insurance.

The Differences Between Admitted Vs Non-Admitted Insurance

There are many differences between admitted vs non-admitted insurance. What's most important is that you are knowledgeable when making a decision. And, that you find a reputable company.

As individuals or as business owners, we need a reputable company that can protect our assets and loved ones.

Non-admitted insurance policies are commonly referred to as "excess and surplus insurance." This is because non-admitted insurance companies fill-in gaps created by admitted insurance companies.

For example, non-admitted insurance companies can create specialty policies. They also cover higher-risk policies and insure high-risk individuals who admitted companies cannot.

In other words, they are able to meet excess demands not coverable by admitted insurance companies.

Explore more differences between admitted vs non-admitted insurance below.

Government Backing

The biggest difference between admitted vs non-admitted insurance is government backing. To become an admitted insurance agency, the state requires companies to go through an approval process. This approval process mandates these companies to adhere to laws, regulations, and policies.

Part of this approval process requires these companies to submit their rates, product offerings, and policy forms. In exchange for becoming an admitted insurance companies the state then backs them via guaranty funds. This is helpful if an insurance company goes bankrupt and can't afford to pay out claims.

Coverage Types

Another difference between admitted vs non-admitted insurance is the types of coverage available. Non-admitted insurance carriers still have to follow certain laws. But, they are better able to offer coverage if an admitted company cannot.

They can be more flexible and meet consumers' needs. They may also offer coverage that admitted companies can't offer.

A non-admitted company may be better suited to offer insurance on high-value homes. They can also ensure high-risk individuals or high-risk areas. This is essential to consumers who need insurance but can't be covered by an admitted company.

However, a licensed insurance broker should offer admitted insurance coverage before offering non-admitted insurance. In the event that an admitted insurance company cannot insure you, then a non-admitted insurance company may be able to.

To make sure that you're covering all your bases it's also important to speak with multiple brokers. Especially, if you aren't comfortable with relying on a non-admitted insurance company.

Risk Tolerance

The decision between admitted vs non-admitted insurance usually comes down to risk tolerance. Admitted companies have many more protections in place in case a company goes bankrupt. This is because of government backing that will pay out claims if the company becomes insolvent.

To become a non-admitted insurance company, however, excess capital must be present. These companies may or may not have a fund available in case an underwriter cannot meet their liabilities.

Not all non-admitted insurance companies have a liability fund in place. So, it's important to conduct research beforehand.

In most cases, if a non-admitted company goes out of business, their estate will not cover their outstanding credits. This means that policyholders will receive only a fraction of their insurance claim.

If an admitted company cannot offer you specific coverage, then this is also a risk. We all need adequate coverage and if an admitted insurance company can't cover you, then a non-admitted company may be able to.

Ultimately, you don't need to feel like you're making a high-risk decision if you're in need of non-admitted insurance coverage. One way to reduce this risk is by researching the non-admitted insurance company.

Check their credit rating, financial history, and online reviews. You can also ask to speak in detail with a company representative.

Price Variances

Admitted insurance companies are required to follow strict product and pricing options. This is because of the approval process they undergo to be accepted by the state as an admitted company. As a result, these insurance agencies tend to offer stable pricing options.

Non-admitted insurance companies are not regulated as strictly. Once a non-admitted insurance company is registered with the Surplus Lines Office, they are not required to get approval for pricing or product offerings. This allows them to set their own rates, which may make their businesses more profitable overall.

Non-admitted companies are also subjected to taxes and fees which can make their policies more expensive.


One of the greatest benefits of non-admitted insurance is its ability to remain accessible. While this may come at an added cost and risk, it allows people to find coverage for their specific needs.

One such instance is the case of high-risk candidates. Admitted insurance companies may simply be unable to insure high-risk candidates. For example, too many past insurance claims might make a person a high-risk candidate

Non-admitted insurance companies may then be able to step in and ensure this person.

Noncitizens are also able to get coverage from non-admitted insurance companies. For example, these individuals can receive health coverage from a non-admitted insurance company.

If you live in an area where natural disasters occur, an admitted insurance agency may consider this a high risk. Therefore, they may not be able to ensure you. However, a non-admitted insurance company may be able to meet your insurance needs because of their flexible policies.


Having insurance is always a good thing, but what happens when you need to make a claim? Having insurance doesn't always guarantee that a claim will be paid out. The company could refuse to pay out a claim based on the standards written in the policy.

Many people find themselves frustrated when they need to use their insurance and their claim is denied. They may find themselves asking what the point of having insurance is if they don't receive the benefits when a claim needs to be filed.

This type of scenario demonstrates why it's important to read your policy thoroughly. It also shows why it's important to choose a reputable insurance agency.

A source of comfort policyholders with an admitted insurance company have is recourse. Since admitted companies are associated with the state, the state can provide recourse if your claim was denied.

Non-admitted insurance policyholders do not have this option. You can attempt to speak with your broker if a problem arises. The state commissioner's insurance office or the surplus lines office may also be able to help.

Sometimes insurance companies become insolvent. If a claim is outstanding during insolvency admitted companies offer you more protection. The government backing the admitted agency will then be required to pay out a part or all of your claim. Non-admitted companies have no such backing and may not be able to pay out the claim from their estate.

Purchasing Admitted Vs. Non-Admitted Insurance

Buying admitted vs. non-admitted insurance is sometimes determined by your insurability status. The type of coverage you need can also play a role.

When buying non-admitted insurance, research the insurance agency in advance. Check out their credit rating, online reviews, and speak with them before purchasing. This will be important if you need to file a claim.

Speak with a non-admitted insurance agency about their plan should they go bankrupt. Do they have a fund to pay out claims if needed? What percentage of claims do they fulfill on a yearly basis?

Asking questions like these will help you to determine if a non-admitted insurance company is right for you. After all, you're placing your most precious possessions in their hands.

Need reputable insurance in Canada? Get a quote and start shopping for insurance coverage today.

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