Insurance is designed to protect you for the unexpected. However, insurance carriers prefer a level of predictability in the risks they insure. While they will not pay claims on loss that you know will happen, like wear and tear, they like the types of risks they understand and can easily “rate."
Predicting the Unpredictable
What happens when you have a more unpredictable risk? Homes or businesses on islands that will most likely be hit by high winds. 24-hour businesses, manufacturing with flammable materials, new businesses without experience, or you had large prior losses. These are all examples of higher risk opportunities. This is where Surplus and Excess Lines Carriers come in.
Play By The Rules
These carriers are not admitted or licensed with the state. They are not regulated by the Department of Insurance the same way that licensed carriers are. When they are not as regulated, they do not have the same rules and rates they must follow. This gives them the freedom to have broader guidelines and the ability to accept risks that licensed insurers will not. There are still state and federal standards for these types of insurers, so it is not the Wild Wild West.
What Does This Mean For You?
Sometimes Surplus Lines can be more expensive than standard market option due to taxes and fees, along with being a riskier exposure. They might require different applications and questions to be asked. However, this might be the only option available for your business or property.
Legally, an agent cannot provide a Surplus Lines quote to you unless standard markets have declined to quote.
Both the agent and insured must sign a form guaranteeing they have looked for other options for insurance.
Surplus and Excess Lines are a solid option for unique businesses, properties, and risks.
It does not mean you are with a “bad” carrier or you are a “bad” risk, it just means you might have a higher risk for claims and need a more specialized approach.
We Can Help!
Consultative Insurance Group works with several nationally known Surplus Lines brokers with dozens of carrier options to best fit your needs!
We are now accepting in-person, telephone or virtual consultations.
We look forward to working with you and your business.