What is a common perception regarding surplus lines insurance?

Surplus lines insurance is often perceived as risky and complicated primarily due to the nature of the coverage it provides. This type of insurance is used for risks that standard insurers are unwilling to underwrite, which often includes unique or high-risk situations that fall outside conventional insurance offerings. Consequently, consumers may view it with caution because it deals with specialized risks that they may not fully understand. The complexity arises from the regulations and underwriting processes, as well as the fact that surplus lines are not subject to the same state regulations as standard insurance, causing consumers to be wary of its implications.

This perception can create a barrier for consumers seeking coverage, as they might fear both the risks associated with such policies and the potential difficulties in navigating claims processes or understanding terms and conditions. Therefore, viewing surplus lines insurance as risky and complicated reflects a common but understandable assumption among consumers who are less familiar with these specialized types of coverage.