What is a 'Non-Admitted Insurer'?

A 'Non-Admitted Insurer' refers to an insurer that is not licensed to operate in a specific state, such as Arizona. These insurers are often utilized when traditional insurance markets cannot provide the necessary coverage. They are typically used for specialty or high-risk coverage and can offer flexibility and innovative solutions that licensed insurers may not provide.

Non-admitted insurers can operate in the state through the surplus lines market, which allows licensed insurance brokers to place coverage with these insurers after certain conditions are met, such as demonstrating that the coverage could not be obtained through admitted carriers. This is critical in situations where the risk is unusual or the coverage required is not available in the admitted market. Understanding the nature of non-admitted insurers is crucial for navigating the complexities of the insurance market, especially when dealing with specialized risks.