What does it mean when an insurer is described as "non-admitted"?

When an insurer is described as "non-admitted," it means that the insurer is not licensed to operate within a particular state. However, they are allowed to provide coverage in that state. This scenario often occurs when an insurer does not meet state regulations or chooses not to go through the licensing process, but still wishes to offer their insurance products.

Non-admitted insurers typically cater to specific risks or niche markets that admitted insurers may not cover. Clients seeking coverage from a non-admitted insurer usually need to be aware that these policies may not have the same level of consumer protection benefits as those from admitted insurers, which are subject to state regulations, including guarantee fund protections. This understanding is essential for both the insurance producers and their clients when navigating the insurance marketplace.