What are admitted vs. non-admitted insurance carriers?

What is the meaning of comparing apples to apples? This means comparing things, in this case, Medical Malpractice Insurance, that can reasonably be compared. The phrase apple to oranges is used to represent a comparison that is unreasonable. When shopping the best rates and coverage for Medical Malpractice Insurance one should be able to compare apples to apples, not apples to oranges. How do you choose the correct apple, insurance carrier, in a market saturated with comparable fruit? No one wants to pick up an orange or a sour Granny Smith apple when they expected to pick up and enjoy a Red Delicious apple.


An admitted insurance company has been approved by a state’s insurance department, whereas a non-admitted insurance company is not backed by the state.

What does being backed by the state mean:
  • The insurance company must comply with all state regulations regarding insurance, which are established and overseen by the National Association of Insurance Commissioners.
  • If the insurance company fails financially, the state will step in to make payments on claims as necessary.
A non-admitted insurance company isn’t approved by the state, which means:
  • The insurance company does not necessarily comply with state insurance regulations.
  • If the insurance company becomes insolvent, there is no guarantee that claims will be paid, even if the case is active at the time of the bankruptcy or financial failure.
  • If policyholders think their case was handled improperly, they can’t appeal to the state insurance department.

Are admitted or non-admitted insurers more beneficial for business owners?


There are situations when both admitted and non-admitted insurance companies may be beneficial for business owners.

For business owners, buying from an admitted carrier means three things:
  1. You don’t have to pay various fees and taxes when you purchase a policy because the company’s status makes those expenses unnecessary.
  2. If the company fails for some reason (e.g., claims after a natural disaster deplete its reserve of funds), you have a guarantee that the state will step in and cover your claims.
  3. If you think your insurance company handled your claim improperly, you can appeal the decision to the state insurance department.
Buying from a non-admitted carrier may be beneficial for businesses that face risks that the standard insurance market won’t cover. For example, if your business is located along the Gulf Coast, it may be difficult to find an admitted insurer to cover property for hurricane damage.

In addition to admitted and non-admitted status, insurance companies are given letter grades from A++ to F. These grades are calculated by a credit rating firm called A.M. Best. A non-admitted insurance company with a high rating is most likely a solid bet for insuring your company, while an admitted carrier with a C rating or below could be risky.