Skip to content
× FreshBooks App Logo
Official App
Free - Google Play
Get it
You're currently on our US site. Select your regional site here:

Admitted Insurance: Definition & Overview

Updated: February 6, 2023

Taking out various kinds of insurance policies can be beneficial. It can all depend on exactly what you need to be insured, but they provide added peace of mind when an unforeseen circumstance occurs. 

Yet, it’s critical to ensure any type of policy you take out is provided by an insurance provider that’s legally allowed to offer it. Admitted insurance providers are licensed to do this. Continue reading to learn about what it is, the benefits, and a few differences worth understanding.

List IconTable of Contents


    • Admitted insurance is licensed in your state. Non-admitted insurance isn’t licensed in your state. This doesn’t necessarily make one better than the other.
    • A non-admitted insurance carrier may have more benefits than admitted insurance does. It’s more specialized to fill the gap in high-risk areas.

    What Is Admitted Insurance?

    Admitted insurance is coverage offered by an insurance provider. This provider is licensed through the state insurance agency of the state they’re operating in. That makes them subject to that particular state’s regulations on insurance, claims handling, and rate approvals. If an admitted insurance company fails to meet state standards then the state can take over and pay claims on behalf of the company.

    In comparison, a non-admitted insurer isn’t licensed in your state. So if they reach a point of financial failure then the state doesn’t offer the same protections to its customers. However, that doesn’t mean they aren’t allowed to sell insurance in your state.

    Skip The Crash Course In Accounting

    Benefits of Admitted Insurance

    The differences between admitted and non-admitted insurance carriers don’t stop at state licensing. Admitted insurance carriers have the following traits:

    •  Built-in right to appeal their claim with the state insurance department
    •  State intervention if the insurance provider undergoes financial failure.
    •  Stricter underwriting rules

    What is Non-Admitted Insurance? 

    Non-admitted carriers are also known as surplus lines or excess and surplus (E&S) insurance. Even though they aren’t licensed in your state they can still offer good benefits for their customers. The benefits of using non-admitted Insurance include:

    • Doesn’t have to follow the same underwriting rules as admitted carriers
    • Doesn’t have to set the same rates as admitted insurers so they may offer more affordable rates
    • Many non-admitted insurers are registered as admitted in other states
    • Their policy forms and products aren’t regulated by the state so they might offer more
    • They extend coverage in high-risk markets
    •  Often more equipped to handle large losses.

    The downside to non-admitted insurance products is that they aren’t covered by the state if they go bankrupt so your claim might go unanswered. And since their claims aren’t licensed by the state, there’s no support if you feel they’ve mishandled your claim.

    Get A Headstart On Your Accounting

    Difference Between Admitted and Non-Admitted Insurance

    The difference between admitted and non-admitted insurance is simple. Admitted insurance companies pay into a state guarantee fund. While non-admitted insurance doesn’t. Not paying into the state guarantee fund means that non-admitted insurance isn’t licensed by that state. So while they might meet the registration requirements in a different state, they’re considered non-admitted. 

    For consumers, there’s an even bigger difference between admitted and non-admitted insurance. If a non-admitted insurance company goes bankrupt there’s no guarantee that their outstanding claims will be paid. So policyholders would potentially be left without recourse for their claim. Non-admitted policyholders also can’t file appeals with the state’s department of insurance. This is if they think their claim isn’t being handled properly. 


    Overall, admitted insurance might seem like a safer bet since it’s licensed by the state. This offers consumers protection if the insurance company goes bankrupt. However, non-admitted insurance may be a better option for certain people. For example, those who don’t meet the eligibility requirements for admitted insurance. The best way to check an insurance company’s rating is through AM Best. This is an insurance credit rating firm that assigns grades of A++ to F to assess a company’s service.

    Fresh Starts Deserve FreshBooks

    FAQ About Admitted Insurance

    What is the difference between surplus lines and admitted?

    Admitted insurance is licensed by the state they’re operating in and surplus lines insurance isn’t.

    How do you know if a carrier is admitted?

    A non-admitted carrier is required to disclose that they are non-admitted since they don’t pay into the state guarantee fund.

    What is admitted assets?

    Admitted assets are an insurance company’s held assets that are required to be disclosed on their balance sheet.


    553 HRS


    $ 7000




    Try It Free for 30 Days. No credit card required. Cancel anytime.