Which type of insurance is referred to as independently procured insurance?

Independently procured insurance refers to insurance that is obtained directly from a nonadmitted insurer without going through a licensed agent or broker. Nonadmitted insurers are those that are not licensed by the state where the insurance is being purchased. This type of insurance is typically utilized when coverage is not available through admitted carriers, often due to the unique or high-risk nature of the exposure needing coverage.

The process involves the insured directly contacting a nonadmitted insurer, negotiating terms, and purchasing the policy independently. It is important for insureds engaging in this practice to be aware of their responsibilities, including paying any necessary surplus lines tax, as this insurance is not subject to the same state regulations as policies written by admitted insurers. This type capitalizes on the availability of options that an insured may feel are better suited for their specific needs, especially when traditional markets cannot accommodate those requirements.