View Our Complete Insurance Glossary with Terms and Definitions
An insurer is licensed to conduct business in the state or country. The insurer is a fully licensed carrier, and they are approved to provide specific lines of insurance coverage in the state the insurance exposure is located.
Admitted insurance companies are backed by the state, which means:
- The company must follow the rules set by your state's DOI or insurance commissioner.
- State insurance laws and regulations must be met before a carrier can sell insurance in your state. The state verifies that the carrier's forms, rates, and requirements comply.
- The state will step in to make payments on claims if the insurance company fails financially.
An unadmitted insurance company isn't required to be approved by the state, so:
- The insurer may not be in compliance with state regulations.
- Even if the case is active during the time of bankruptcy or financial failure, it is not guaranteed that claims will be paid if the insurer becomes insolvent.
- It is not possible for policyholders to appeal to the state Department of Insurance if they believe their case has been handled improperly.
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