Insurance for restoration contractors is very specialized. As such we often work with both admitted insurance companies and non-admitted insurance companies. In this post we want to talk about the difference between the two types and why this is so important to your restoration company.
Admitted Insurance Carriers
An insurance company that is “admitted” has been approved by a state’s insurance department. Being “admitted” by the state’s insurance department means:
The insurance company must comply with all state regulations regarding insurance (which are established and overseen by the National Association of Insurance Commissioners).
In the event that the insurance company fails financially, the state’s guaranty fund will step in to make payments on claims as necessary.
You have to ability to appeal claims decisions through the state insurance department.
Non-Admitted Insurance Carriers
An insurance company that is “non-admitted” has not been approved by the state’s insurance department. This means:
The insurance company does not necessarily have to comply with state insurance regulations.
If the insurance company becomes insolvent, there is no guarantee that your claims will be paid, even if your case is active at the time of the bankruptcy or financial failure.
You cannot appeal claims decisions through the state insurance department.
You must pay additional surplus lines fees and taxes when you purchase your policy.
In looking at both options, it’s plain to see that restoration contractors should purchase their policies from admitted carriers whenever possible. However, there are situations where purchasing a non-admitted policy may be your only option.
To find out what options you have in purchasing an admitted insurance policy as a restoration contractor, please contact our office to find out more.