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 race horse
- 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 more flexibility to design and price their policies.
- Generally charge consumers higher premiums because they insure risks that are usually more 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.
Regulation of surplus line
Surplus line insurance brokers are:
- Allowed to obtain a policy for you from an insurer who's not licensed in our state.
- Regulated by our office (leg.wa.gov).
Surplus line insurance companies are:
- Subject to the trade practices under the state's unfair claims settlement rule (leg.wa.gov).
- Generally required to maintain a minimum of $15 million in capital and surplus, per federal and state laws.
Surplus line insurance companies are not:
- Licensed by our office.
- Subject to our review of their rates and policies.
- Protected by our state guaranty funds.
How to get coverage from a surplus line company
Contact a licensed agent (fortress.wa.gov) (also called an insurance producer) who can help you find coverage through a licensed surplus line broker.