Admitted Insurance

DEFINITION of 'Admitted Insurance'

Insurance purchased from a company that is admitted (or licensed) in the state in which the policy was sold. Admitted insurance must also be sold by an agent who is licensed in that state.

BREAKING DOWN 'Admitted Insurance'

By contrast, many states will allow non-admitted carriers to transact business in their state where there is a special need that cannot or will not be met by admitted carriers. Non-admitted carriers are usually referred to as "surplus" or "excess lines insurers". Non-admitted carriers are not regulated in that state and do not contribute to the State Guaranty Fund, which protects policyholders from the bankruptcy of its insurance carrier.

Insurance purchased from these carriers is therefore riskier than doing business with admitted carriers and brokers must inform consumers if their insurance has been placed with a non-admitted insurer. Also, the purchaser and/or the insurance broker must provide a statement that it made a good faith effort to obtain the insurance from admitted carriers before seeking out a non-admitted carrier.

RELATED TERMS
  1. White List States

    The group of U.S. states that permit the addition of specialized ...
  2. Surplus Lines Insurance

    A policy that protects against a financial risk that is too high ...
  3. Admitted Company

    An insurance company that is domiciled in one state but is admitted ...
  4. Nonadmitted Balance

    An item on an insurer’s balance sheet that represents reinsured ...
  5. Annual Convention Blank

    The annual report that insurance carriers must file with the ...
  6. Common Carrier

    A commercial entity that gets paid to transport goods or people. ...
Related Articles
  1. Home & Auto

    Bundle Your Insurance For Big Savings

    Bundling your insurance can save you money and time. Read on to see how get the most out of multiline insurance discounts.
  2. Investing

    What does Free Carrier Mean?

    Free carrier is a trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. Costs for transportation and risk of loss transfer ...
  3. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  4. Entrepreneurship

    Becoming An Insurance Agent

    Few careers match the opportunity for as quick and large a paycheck as does being a life insurance agent.
  5. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  6. Home & Auto

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
  7. Home & Auto

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  8. Insurance

    How To Compare Home Insurance Companies

    There's a ton of information out there. Here's how to organize it and find the best company and best rates when you insure your home.
  9. Insurance

    Explaining Insurance

    Insurance is a form of contract between an individual and an insurance company that spreads risk in exchange for premium payments.
  10. Insurance

    How to Protect Your Income No Matter What

    What does it mean to insure your income? Here are a variety of ways to do it and some insights into when it might make sense to invest in income insurance.
RELATED FAQS
  1. Can your insurance company cancel your policy without notice?

    Learn about your rights as an insured when it comes to your insurance policy being canceled, including how to access your ... Read Answer >>
  2. Can you do a life insurance to life insurance 1035 exchange after the new life insurance ...

  3. What is the difference between the death benefit and cash value of an insurance policy?

    Understand the difference between the various components of a life insurance policy including the death benefit and a policy's ... Read Answer >>
  4. How do I choose which insurance company to use?

    Picking an insurance company to use is not an easy task, considering the financial crisis of 2008 and 2009. Several financial ... Read Answer >>
  5. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  6. How does an insurance broker make money?

    Discover how an insurance broker makes money. Insurance brokers are important in helping people find the right insurance ... Read Answer >>
Hot Definitions
  1. Physical Capital

    Physical capital is one of the three main factors of production in economic theory. It consists of manmade goods that assist ...
  2. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  3. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  4. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  5. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  6. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
Trading Center