Let's break down the difference between admitted and non-admitted insurance carriers. The distinction lies in their relationship with state regulations and the level of financial protection they offer.
Admitted Insurance Company:
An admitted insurance carrier is backed by the state and has these characteristics:
- The carrier must comply with regulations set by the state's Department of Insurance.
- If the carrier faces financial difficulties, the state will step in to ensure necessary payments are made on claims.
A non-admitted insurance carrier isn't state-approved and has these implications:
- The carrier may not follow state insurance regulations.
- If the carrier becomes insolvent, there's no guarantee that claims will be paid, even during ongoing cases.
- Policyholders cannot appeal to the state insurance department in case of perceived improper case handling.