What does "non-admitted" insurer mean?

A "non-admitted" insurer refers to an insurance company that is not licensed to operate within a specific state. This status allows these insurers to provide coverage for risks that may be difficult to insure through standard markets. Non-admitted insurers can underwrite policies that might not meet the strict regulatory requirements imposed on admitted insurers while also providing flexibility in coverage options and pricing.

In many cases, surplus lines insurance, which often involves non-admitted insurers, is used to cover unique, specialized, or high-risk situations where traditional insurance markets either cannot or will not provide coverage. The lack of a state license means these insurers are not subject to the same regulations as admitted insurers, which can lead to more innovative insurance solutions tailored to the needs of specific risks.