Admitted VS Non-Admitted

[insurance1822]

Hey guys I understand non-admitted carriers aren't backed by the state gurantee fund, but besides that...are they ALWAYS a worse option? Is it possible to get a non-admitted carrier that will provide the same coverage as admitted?

It's my understanding that non-admitted carriers could have different policy forms & contain particular endorsements that reduce coverage. Is it possible to get those endorsements removed OR do you "get what you get."

 

[AZDave]

They should always be the last option, and are the worst option. Unless you are looking at strictly monoline coverage, it is not possible to bring up a non admitted carrier coverage to equal a normal 'bop' policy. Sure you can add the loss of income, crime, property of others, im, sign, etc. piece by piece. But it will never be as robust as what can be offered by an admitted carriers bop. Again, if it is just monoline gl, then the forms usually are the same.

In AZ, I have to sign off that the risk has been denied by three admitted carriers before I can bind a non admitted policy.

I do a lot of brokerage non admitted business. Any chance I can move it to admitted, I do. And yes, I fee it.

Good Selling.

Dave

 

[Arnage150]

Hey guys I understand non-admitted carriers aren't backed by the state gurantee fund, but besides that...are they ALWAYS a worse option? Is it possible to get a non-admitted carrier that will provide the same coverage as admitted?

It's my understanding that non-admitted carriers could have different policy forms & contain particular endorsements that reduce coverage. Is it possible to get those endorsements removed OR do you "get what you get."

The short answer is no they are not always a worse option. I know of many non admitted policies that are better then admitted ones. Generally speaking tho, admitted is better than non admitted.

ADMITTED
Pros: Claims are guaranteed by a state insurance assoc.
Cons: Claims are only guaranteed up to state determined amounts
Limited pricing options (credits, taxes, etc.)
Limited/generalized coverage due to state registered forms.
Misconceptions: Admitted carriers are “safer”
Admitted policies don’t include taxes
States require you to purchase an admitted policy if available
NON-ADMITTED/SURPLUS LINES
PROS
Catered coverage to meet clients needs
Broader coverage at lower prices
Flexible pricing options (credits,non-auditable, etc.)
Consumers are protected as surplus lines carriers are required to have substantial financial reserves.
CONS
Surplus lines claims are not covered by state limit set guarantees in the case of carrier insolvency

 

[AZDave]

One more point: most non admitted audits are a one way. NO REFUNDS if you overestimate exposure.

 

[indienoise]

Can I bump this thread? I'm curious about this issue, but on personal lines. I've had to go the non-admitted route before for undesirable risks, ie. Lloyd's for homeowners with gaps in coverage, bad credit, etc., but I just haven't worried much about writing a ton of homeowners til now, so my experience is a bit limited.

I just got my new agency started up and the MGA I'm using is big on one non-admitted carrier that kind of writes everything (Lexington), and I have a feeling I'm going to be doing a good bit of monoline property business because a lot of the auto market here is nonstandard, and home values tend to be on the low side.

What would I need to know going in before doing much business with a non-admitted carrier? Or does it just not really matter that much?

 

[AZDave]

What would I need to know going in before doing much business with a non-admitted carrier? Or does it just not really matter that much?

1. Coverage forms may be quite limited.
2. Billing. If agency bill, you will be spending a lot of time getting paid.
3. Renewal. Make sure they offer automatic renewals. If not, a lot of time spent on re submissions - and getting paid.
4. Commissions are usually lower with non admitted.

Dave

 

[Arnage150]

Can I bump this thread? I'm curious about this issue, but on personal lines. I've had to go the non-admitted route before for undesirable risks, ie. Lloyd's for homeowners with gaps in coverage, bad credit, etc., but I just haven't worried much about writing a ton of homeowners til now, so my experience is a bit limited.

I just got my new agency started up and the MGA I'm using is big on one non-admitted carrier that kind of writes everything (Lexington), and I have a feeling I'm going to be doing a good bit of monoline property business because a lot of the auto market here is nonstandard, and home values tend to be on the low side.

What would I need to know going in before doing much business with a non-admitted carrier? Or does it just not really matter that much?

Lexington is part of AIG so I wouldn't worry about financial stability. Like the person above said, if they require a renewal app every year it is simply not worth writing a lot of it. It is too labor intensive.