What is meant by a non-admitted insurer?

A non-admitted insurer refers to an insurance company that is not licensed to operate in a particular state where it provides coverage. This means that while the insurer may offer policies and coverage options, it does not have the official approval or licensing from the state's insurance regulatory authority. Non-admitted insurers often provide unique insurance products that might not be available through admitted insurers, particularly in situations that involve high risk or specialized coverage needs. By using non-admitted insurers, brokers can access a wider range of insurance products, especially in cases where traditional market options are insufficient.

The choice pertaining to an insurer that operates in multiple states describes a characteristic of many insurers but does not directly define a non-admitted insurer. Offering premium refunds is not a defining feature of non-admitted insurers, and similarly, while many non-admitted insurers might specialize in surplus lines coverage, it is not a requirement for all non-admitted insurers to only sell such coverage. The defining characteristic of non-admitted insurers is their lack of licensing in the state where they are providing insurance.