Admitted insurer

An admitted insurer holds a certificate of authority from a state's department of insurance to sell policies in that state. Most homeowners policies come from admitted companies, often called the standard market.

Being admitted comes with obligations. The company files its rates and policy forms with the regulator, under that state's prior approval or file-and-use rules, and follows the state's rules on cancellation, nonrenewal and claim handling. Regulators examine its finances. If it fails, claims on its policies are generally eligible for the state's guaranty fund, up to the fund's per-claim cap.

Those protections are the main difference from a surplus lines insurer, which is not licensed in the state, does not file its rates the same way and, in most states, is not backed by a guaranty fund. The trade-off runs the other way on flexibility: surplus lines carriers can write homes that admitted companies decline.

Admitted status is state by state. A carrier admitted in Texas may sell only on a surplus lines basis in California. Check the license lookup on your department of insurance's website, or ask your agent whether your quote is admitted or non-admitted. The admitted versus surplus lines guide walks through the differences.