Admitted vs Non-Admitted Insurance: 5 Commonly Asked Questions

In the world of insurance, there are two kinds of products: admitted and non-admitted. Simply put, admitted insurance products are those that are approved and regulated by the state, and non-admitted insurance products are those that are not—but this explanation can raise more questions than it answers.  

In this blog, we break down the major differences between admitted vs. non-admitted insurance products and answer some commonly asked consumer questions. 

1. What’s the difference between admitted and non-admitted insurance?

Admitted Insurance

An admitted insurance product is one that has been licensed and approved by the Division of Insurance (DOI) in the state where it’s being sold. Each state’s DOI has requirements for everything from how much carriers can charge to what kind of coverages are offered to how the carriers communicate with customers. The process of getting a product admitted through this office—or even making changes to a product that has already been admitted—is lengthy and complicated for carriers. But in return, the carrier and its customers get some financial protection from the state. 

As a consumer, you can be sure that if a product is labeled as “admitted,” it has gone through all the necessary scrutiny of its policy requirements, language, and rates, and it meets your state’s DOI regulations.  In the event that your carrier “goes under,” you will have an additional, state-funded safety net wherein debts can be paid by the state up to a certain amount.