Beehive Insurance is an independent insurance agency or brokerage, and as such, we sell the insurance products of dozens of different insurance companies. The various insurance companies can be divided into two separate camps: admitted and non-admitted insurance companies. How Are They Different? Admitted insurance companies are authorized by the Insurance Department to write insurance in Utah. Non-admitted companies (also known as “Surplus Lines”) are recognized by the Insurance Department, but they do not have authority to solicit insurance in the state. They are not subject to the same regulation from the Insurance Department as admitted companies are. Nor are they backed by Utah’s insurance insolvency fund. How Would You Know? It should be disclosed or highlighted in the insurance proposal whether the insurance company is admitted or non-admitted. If not, watch for taxes and fees in addition to the premium and a long list of endorsements, conditions and exclusions – both indicate a non-admitted carrier. Why Does It Matter To You? Admitted insurance companies typically have certain types of businesses they like to write insurance for and others they don’t like. The types of businesses they don’t like to write are usually the ones that are more risky than others. For example, an insurance company might write insurance for a company that makes cotton balls, but it wouldn’t even consider writing insurance for a company that makes dynamite. This is where non-admitted companies come in. These companies generally specialize in certain types of insurance or are more willing to write companies with greater risk, like the dynamite factory. If your business is more unusual or risky than most other businesses, a non-admitted insurance company might have a special program that works perfectly for what you do. Where Can I Get Independent Information To Help Me Make A Smart Decision? I strongly recommend 2 ideas. The first is to get from your agent/broker, or from multiple sources, several quotes to compare. Hold the agents accountable to explain the differences in the quotes. Second, look up the A.M. Best rating of the proposed insurance companies at www.ambest.com. This rating can give you an idea of the insurance company’s financial strength. Here you are looking for a rating of A- or better with a financial size bigger than VII. There are many great insurance companies eager to do business with you. Find a broker that you trust and request quotes from multiple insurance companies. More often than not, this makes the decision process much easier on you, the buyer.
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