What is the main difference between admitted and non-admitted insurers regarding claims?

The primary distinction between admitted and non-admitted insurers lies in the regulatory environment and the flexibility each type of insurer has when it comes to claims handling. Non-admitted insurers are less regulated compared to admitted insurers, which allows them greater flexibility in managing claims processes, underwriting, and coverage options. This flexibility can be advantageous in tailoring policies to meet specific needs or unique risks that traditional admitted carriers may not accept.

Admitted insurers are generally required to adhere to state-mandated rates, forms, and claims procedures, which can result in a more structured but potentially slower claims process due to regulatory oversight. This applied structure means they have specific guidelines that must be followed, which can sometimes limit their ability to adapt quickly to unique claims situations.

Understanding this difference is key in determining the appropriate insurer for a given risk, especially when considering the unique needs that certain situations may call for. Non-admitted insurers fill a necessary market gap by providing coverage where admitted insurers may shy away due to regulatory limitations or risk aversion.