There Are Real Concerns with Using Small Non Rated Insurers

We have seen an increase of small non-rated insurers entering our state. While we are strong advocates of competition, we want you to be aware of some of the issues around using smaller insurers, especially those who are “non-admitted”. Over the years, we have experienced insurers coming into the market and then leaving soon after, so our opinion is based on experience. Here are a few things to think about:

Concerns

• Resources.  With a smaller company usually comes a smaller staff. This might limit their ability to respond to customer needs.
• Limited claims services. Smaller companies won’t generally have localized claims representatives. Let’s face it, the reason you buy insurance is to have your claims settled fairly and quickly.
• Long term stability.  Many times when smaller non-admitted insurers enter a state they cut pricing to “gain market share”. Then in a year or two they require 10-25% increases in premiums.
• Lack of experiences.  You want an insurer that has experience in the regional economy, legal issues, and most importantly your industry.
• Financial security. If you use a non-admitted insurer and they can’t pay claims (for whatever reason), the state guarantee fund will not respond.

We work with experienced and financially sound insurance companies who have been committed to this state and your interests. They have experienced underwriters and claims staff that know and understand your needs.