Deciding whether to choose an admitted vs. non-admitted carrier can be confusing. Admitted carriers are licensed by the states where they write business and must adhere to rate and form regulations. If the insurance company fails financially, the state will step in to make payments on claims as necessary. Non-admitted carriers are regulated by the department of insurance, but they are not required to follow the same filing and form laws, and are not financially backed by the state’s guarantee fund.
Non-admitted carriers, also called Excess and Surplus carriers, are beneficial when high risks are involved, for example a home on the coast, or specialty coverage is needed, such as professional liability insurance. Because of the lack of regulations, non-admitted carriers can cover unique or higher risk items that standard markets cannot. Non-admitted carriers are often better equipped to respond to needs in high-risk scenarios.
While "non-admitted" seems like a negative term, in fact these E&S carriers often are more financially secure than their admitted counterparts and have significant assets set aside. Whether admitted or not, coverage needs and carrier research should drive insurance policy decisions.