Admitted Carrier

An admitted carrier is an insurance company that has been formally licensed by the state insurance department to sell coverage in that state. To earn that license, the carrier must meet the state's financial strength requirements, file its rates and policy forms for review, and agree to participate in the state's guaranty fund. That last part is the most important consumer protection in the admitted market.

The guaranty fund is a state-level safety net funded by all admitted carriers in the state. If an admitted carrier becomes insolvent and cannot pay its claims, the guaranty fund steps in and covers open claims up to its limits -- typically $300,000 to $500,000 per claim for property and liability coverage, though limits vary by state. This means that if your carrier goes under, you are not left with an unpaid claim and no recourse.

Non-admitted carriers, called surplus lines carriers, are not backed by the state guaranty fund. They fill an important role for risks the standard market will not write, but policyholders take on additional financial risk if that carrier fails. When you have a choice between an admitted and a non-admitted carrier at comparable terms and pricing, the guaranty fund protection provided by the admitted carrier is a meaningful advantage worth weighing.