What type of insurer is a nonadmitted insurer?

A nonadmitted insurer is defined as one that is not licensed to operate in a specific state. This means that these insurers do not hold a license issued by the state's insurance department to conduct business there. Nonadmitted insurers often provide coverage for risks that admitted insurers may not be willing to cover, primarily because of higher risk factors or unique situations.

These insurers can operate in a more flexible manner regarding the types of policies they offer and the premiums they set, but they are also not subject to the same level of state regulations as admitted insurers, which means they can take on risks that might be deemed uninsurable by licensed companies. This lack of licensure does not equate to a lack of legal operation; they can issue policies as long as the insurance is placed through a licensed surplus lines broker in states where such provisions exist. Overall, the defining feature of a nonadmitted insurer is its lack of licensing in the particular state where it operates.