Admitted vs. Non-Admitted Insurance Carriers: What’s the Difference?

When buying insurance,especially for business or specialized risks, you may come across the terms “admitted” and “non-admitted” carriers. These terms describe how insurance companies are licensed and regulated, and the difference can affect how claims are handled, how flexible the coverage is, and whether you have backup protection if something goes wrong.

Here’s what you need to know, explained simply.

What Is an Admitted Carrier?

An admitted carrier is approved and licensed by the California Department of Insurance (CDI) to operate in the state. These insurers must follow state rules, file their policy rates and forms for approval, and meet strict financial and legal standards.

They are also backed by the California Insurance Guarantee Association (CIGA). That means if the insurance company goes bankrupt, the state may help pay your claim (up to certain limits).

What Is a Non-Admitted Carrier?

A non-admitted carrier, sometimes called a surplus lines insurer, is not licensed by the state but can still legally offer coverage through licensed surplus lines brokers. These carriers are not required to file rates or forms with the CDI, giving them more freedom to write unique or high-risk policies.

However, they are not backed by CIGA. If the insurer fails financially, there is no state guaranty fund to step in, so it’s essential to make sure the company is financially solid.

Pros and Cons Comparison

How to Ensure Your Non-Admitted Carrier Is Financially Stable?

When working with non-admitted carriers, or even admitted ones, it’s smart to check their AM Best rating. AM Best is a credit rating agency that evaluates the financial strength and stability of insurance companies. Ratings range from A++ (Superior) to D (Poor).

A rating of A- or higher generally indicates that the insurer is in strong financial shape and likely to pay claims reliably.

How George Park Insurance Agency Can Help

At George Park Insurance Agency, we understand that every risk is different. Some clients are eligible for admitted markets, while others need the flexibility and coverage only available through non-admitted carriers. That’s why we offer both options, and only work with financially secure companies rated A- or better.

Whether your business fits neatly into a standard category or needs more customized protection, we’ll match you with the right carrier for your needs.

References

1. California Department of Insurance (CDI) – Admitted and Non-Admitted Insurancehttps://www.insurance.ca.gov/01-consumers/120-company/07-nonadmitted/

2. California Insurance Guarantee Association (CIGA) – What Is Coveredhttps://www.ciga.org/

3. AM Best Company – About Insurance Company Ratingshttps://www.ambest.com/ratings