For Consumers

Surplus line insurance

What is surplus line insurance?

Surplus line insurance is coverage for higher risks, such as a:

  • Home built on the side of steep bank or an extremely old home
  • Very expensive racehorse
  • Rare art or antique collection
  • Custom-made yacht
  • Business operation that poses too great a liability risk

Surplus line insurance is used when licensed insurers in the standard market won't provide coverage because the risk is too much, it's unfamiliar to them or does not meet their guidelines.

Surplus line insurance companies have great flexibility when it comes to designing their coverage and pricing their policies. Generally, they charge their customers higher premiums because they’re insuring risks that are costly to cover.

Due to the unique nature and complexity of these policies, we recommend you read the terms and conditions of your surplus line policy carefully. Make sure you know what you’re buying.

How surplus line insurance is regulated

Our agency is responsible for licensing and regulating surplus line brokers. Once licensed, surplus line insurance brokers are allowed to obtain a policy for you from an insurer who is not licensed in our state.

Surplus line insurance companies, however, are not licensed by our office. We’re not allowed to review their rates and policies. Surplus line customers are not protected by our state guaranty funds if their insurer goes out of business.

To provide some consumer protection, we’ve made surplus line companies subject to the same unfair claims settlement rules as other insurers. They’re also required to have a minimum of $15 million in capital and surplus, per federal and state laws.H2: How to get coverage from a surplus line company

Contact a licensed agent (also called an insurance producer) who can help you find coverage through a licensed surplus line broker.