What Is Surplus Lines Insurance?

When standard insurance companies won't take a risk, surplus lines may be an option. Most policies come from admitted carriers — licensed by the state, with policy forms the state reviews, and backed by state guaranty funds. Surplus lines carriers are non-admitted: they have more flexibility to take on unusual or higher risks, but their policies aren't backed by state guaranty funds and terms can differ significantly. Surplus lines are typically used only when coverage isn't available in the standard market, and they're placed through specially licensed brokers.

Surplus lines (non-admitted) insurance is not automatically available to every customer; state regulations generally require that coverage be unavailable in the admitted market first, and placements must go through licensed surplus lines brokers. Non-admitted policies are not protected by state guaranty funds. Requirements vary by state. This video is general education only and does not guarantee eligibility, availability, or coverage.