Admitted and Non Admitted Carriers
The lease agreement defines the insurance requirements of the motor carrier and owner/operator.
Most lease agreements are constructed to accommodate the use of one vehicle
owned and operated by the same person. This is a preferred insurance situation and is the type of an account insurance companies referred to as admitted or standard would
Owner/Operator insurance is more difficult to place when a motor carrier signs a lease with the owner of a fleet of trucks. One owner, multiple trucks, owner assigns driver to truck and owner pays driver. This is not an ideal insurance situation and is the type of an account insurance companies referred to as non admitted or surplus lines would quote.
An admitted insurance company is one that applies to the Department of Insurance of
each State they do business and agree to conform to the regulations of that State. These
regulations define the minimum financial requirement for admission. Admitted carrier must file their insurance policy and rates with the state, which the state must approve. Admitted carriers also contribute to the State Guarantee Fund.
The state has the responsibility to pay an insured's claim, up to a specified limit, in the event the insurance company becomes insolvent.
A non-admitted insurance company must apply for approval to do business in a State but are not required to conform to the regulations of that state's insurance laws. A non admitted carrier is not covered under the State Guarantee Fund.
A non-admitted carrier does not file their insurance policy or rates with the state for approval. A non-admitted carrier has more pricing flexibility and can insure risk that admitted carriers often can not.
These markets work very well together but you need to understand if your coverage is with an admitted or non admitted carrier. This is very important if moving from an admitted to a non-admitted carrier.
Remember, a non admitted carrier is not regulated. They can place exclusions on their policy that may not be part of a policy issued by an admitted carrier.