Castle Rock Insurance Agency

Admitted vs Non-Admitted Insurance Companies

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Written by Jon Lipton   
Wednesday, July 12, 2006

Admitted Insurance Companies vs Non-Admitted Insurance Companies

When I first entered the Insurance Industry over a decade ago I thought that it was more advantageous to use an insurance company which is 'admitted' vs. one that is  "non-admitted".  Sounds logical, right, elect an insurance company that is "admitted in the state you are operating in which means:

Admitted

Filed with and subject to the laws and regulation of the state they are admitted in.  Also, means that in the event of insolvency the state WILL step in and make good on claims and premium remuneration if applicable (Simplified version)

Non-Admitted

Not filed with and subject to the laws and regulation of the state they are admitted in.  Also, means that in the event of insolvency the state WILL NOT step in and make good on claims and premium remuneration if applicable (Simplified version)

Beware, there are Companies 'Admitted' to do business in the State you are operating in that may carry a "B" or worse rating that are on the brink of bankruptcy.  If they do fold you may wait YEARS to be refunded money you are owed and or be held up in legal battles if you are in the middle of a suit at the time of bankruptcy.  Also, many Mortgage Companies, Home Owners, Business and Build Owner will not offer you a mortgage or let you work on their property with a 'B' carrier or worse.

Additionally, there are 'Non-Admitted' carriers that have 'A' and better ratings, as high as 'A++' with tens of billions of dollars in the bank that are nowhhere near bankruptcy.

If available and an option, take the better company with the bigger financial strength.

 

Castle Rock Insurance Agency - Commercial General Liability
Admitted vs. Non-Admitted Insurance Companies

 
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