Admitted vs Non-Admitted Insurance Carriers: Choosing the Right Option in Ohio

Navigating the world of insurance can feel like trying to understand a foreign language. One term you’re likely to encounter is “admitted” versus “non-admitted” insurance carriers. While they both provide insurance coverage, understanding the difference is crucial for making informed decisions about your protection. This blog will break down the key differences and explain why they matter, with a focus on how these concepts apply in Ohio.

Admitted Carriers: Your Reliable Main Street Option

Admitted carriers are insurance companies licensed and regulated by the Ohio Department of Insurance. This means they’ve met specific financial stability requirements and abide by Ohio’s regulations regarding policy forms, rates, and claims handling. Think of them as having the state’s “stamp of approval.” A key benefit of using an admitted carrier in Ohio is the protection offered by the Ohio Insurance Guaranty Association (OIGA). This fund steps into pay covered claims if the insurance company becomes insolvent, up to certain limits.

Non-Admitted Carriers: The Provider of Unique Insurance Solutions

Non-admitted carriers, also known as surplus lines insurers, are not licensed in Ohio. They are allowed to operate in the state because they provide coverage that admitted Ohio carriers are unwilling or unable to offer. This often includes unique or high-risk situations, like insuring a rare collectible, a specialized business, or a property in a high-risk area. While they aren’t subject to the same Ohio regulations as admitted carriers, they are still regulated in their home state and must meet certain financial requirements. It’s important to note that claims against non-admitted carriers in Ohio are not protected by the OIGA. While there are some risks, generally these Non-Admitted Insurance Carriers are financially sound, operate in good faith, all while honoring the insurance contracts they have in place with their customers.

Key Differences at a Glance:

Secure Your Coverage

The choice between admitted and non-admitted carriers in Ohio depends largely on your specific insurance needs.

• Standard Risks: For most common insurance needs in Ohio, such as auto, home, and standard business insurance, an admitted carrier is usually the best choice. The OIGA provides an important safety net, and the regulated environment offers greater consumer protection within the state.
• Unique or High-Risk Situations (Ohio): If you need coverage for something unusual or difficult to insure in Ohio, a non-admitted carrier might be your only option. They specialize in providing coverage for risks that admitted Ohio carriers will not insure.
• High Limit Options: Stacking layers of coverage sometimes requires partnering with non-admitted carriers.  With recent market changes, we’ve seen carriers limit both property and liability limits.  We’ve had many situations that have an admitted underlying layer of protection and a secondary non-admitted layer on top to keep an insured compliant with a contract requirement or to properly protect their exposure and assets.  See the example below of a real-world solution for one of our clients using both admitted and non-admitted carriers to come up with a coverage solution that satisfies all the client’s needs.

Umbrella Liability Example: High Hazard Contractor– $1mm admitted carrier underlying umbrella coverage. $4mm secondary non-admitted option. $5mm third layer non-admitted option. Total umbrella liability coverage of $10mm.  

The Hitchings Insurance Takeaway:

Don’t do it alone! Talk to us at Hitchings Insurance. We can help you navigate the confusing world of insurance and find the right coverage for your needs, whether it’s with an admitted or non-admitted carrier. We’ll help you understand the risks and rewards of each option, so you can make an informed decision.