What does it mean when an insurance product is “admitted”?

If you’ve ever been tasked with researching and evaluating insurance products, you know it’s not exactly the most straightforward process. 

You’ll come across lots of industry-specific terms that mean nothing to anyone outside of the world of insurance. But understanding what these terms mean is essential to making sure you’re choosing a provider and product that’s right for your needs. 

One of the most common of these is “admitted”—and, on the flip side, “non-admitted.” In this post, I’ll get into what, exactly, that means, and why it matters for anyone considering purchasing an insurance product.   

What does it mean when an insurance product is “admitted”? 

When an insurance product is “admitted,” it means the company offering it has been licensed by the Department of Insurance in the state (or states) in which it’s sold. Every state has its own requirements, so providers that want to sell admitted products across the U.S. must file with each state’s insurance commissioner and make sure they’re compliant with individual state regulations. 

Admitted products must be filed with the state DOIs. These product filings are public, meaning  anyone can see how pricing is set, and can verify that the provider is charging the correct amount for policies. 

After an admitted product has been approved, the provider must remain compliant with all state insurance regulations and can’t change its pricing model or contracts (or what is and isn’t covered by the policy) without re-filing. In the event that they do change a product, this information is also public—meaning that anyone can see exactly what they’re changing. 

Admitted status also adds a layer of protection to the policyholders in the event that the provider fails. After a product is admitted, the provider is required to contribute a portion of its revenue to state funds. Then, in the event that they’re unable to pay out covered claims, the state will step in and make those payments—meaning that the policyholder is still protected. 

State insurance departments can also help policyholders with issues they run into with admitted products. If a customer believes that a claim is not handled properly, for example, they can appeal to their state’s insurance department. 

Does it really matter whether an insurance product is admitted? 

In a word: yes. 

The alternative to an admitted insurance product is a non-admitted, or excess-and-surplus lines product. Consumers can only access these if an admitted product is not available, or if they haven’t met the underwriting requirements of admitted carriers. 

Providers selling non-admitted products are not regulated by state Insurance Departments in the same way as those selling admitted products. While the carriers do have to be licensed to operate and sell non-admitted products, the products themselves are not required to be filed. This means there’s no visibility into their pricing models or transparency around how prices or coverage are set. 

These providers can also make changes to their products without approval from each state’s Department of Insurance. This means they can change their pricing models, along with what is and isn’t covered by their products, without providing public documentation of those changes. 

Finally, if a provider that offers non-admitted products fails, policyholders don’t have the extra layer of protection from their states’ guaranty fund. These products do not participate in the State Guaranty fund and as a result, consumers are not protected in the case of insolvency. Policyholders also have no state DOI recourse available to contest the handling or outcome of a claim. 

Finally, it’s worth mentioning that as more states introduce legislation mandating that properties offer their residents an alternative to cash deposits, these laws can require any insurance products offered as an alternative to be approved by the state. This means that for properties looking to stay ahead of the curve and choose a deposit alternative ahead of impending legislation, selecting one that’s admitted is a must. 

Jetty’s products are admitted, regulated, and safe

Jetty has gone through the rigorous process of getting our products admitted by each state’s Department of Insurance. We believe that this is the gold standard for all insurance products, and we’ll continue to do it for everything we offer to our Partners and Members. 

We’re also backed by Farmers Insurance Group and products are written on ‘A’ rated paper. This means we’re a safe choice—both for properties, and for the residents that purchase our policies.  

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