The Insurance Fixer Newsletter

The Insurance Fixer
Scott Simmonds, CPCU, ARM

July, 2006 -- Special Edition -- Unbiased Insurance Info & Advice --- www.InsuranceFixer.com

Admitted vs. Non-Admitted Insurance

Insurance companies can be classified as admitted or non-admitted. The distinction resides in the insurer's way of doing business in a particular state.

Admitted insurers agree to file forms and policies with the insurance regulators in your state. Their financials are subject to scrutiny as are their premium rates and underwriting practices. Most "standard" insurance policies are written through admitted insurers - home, auto, business owners policies. Many professional liability, directors and officers, and pollution liability insurance policies are written on a non-admitted basis. Liability coverage for "hazardous" industries and insurance for companies with poor loss experience may also be written on non-admitted policies.

Non-admitted insurers are under fewer regulatory restrictions. Some of the biggest and best insurers in the world choose to do business as a non-admitted insurer in some or all states. Many "household name" insurance companies have subsidiary insurers that issue insurance contracts as non-admitted insurers. AIG, Zurich, Lloyds, and hundreds of other fine insurance companies are non-admitted carriers.

Status as a non-admitted insurer does not mean sub-standard.

Access to a state-run guaranty fund is touted by many as the key benefit of working with admitted insurers. The fund pays off should the insurer become insolvent. Many agents describe guaranty funds as the insurance equivalent of FDIC.

Not quite true.

First off, guaranty funds have limited liability to policy holders. Maine and Massachusetts limits recovery to $300,000 as do many states. Colorado limits recovery to $100,000. Not much when you are speaking of asset protection - million dollar buildings or liability insurance limits...

Some states provide no coverage for "High-Net Worth" individuals and organizations. Maine uses $25,000,000 as the threshold. Pennsylvania defines "high-net worth" as $50,000,000.

To learn how your state guaranty fund works go to http://www.ncigf.org/guaranty/gflbystate.asp.

The key to selecting an insurance company is not its status as admitted or non-admitted. It is the experience and financial strength of the company. Review the ratings of AM Best and Weiss Ratings when reviewing your insurer. Neither is a guaranty. However, neither are the state guaranty funds.

Snow Plows (Apologies to My Southern Readers)

I know that summer is a strange time to be talking about snowplows. Stay with me here.

If you have a truck that has a mounting for a snowplow, make life easier and be sure your insurance policy has the truck listed as "2005 Ford F150 Pickup with Plow." In that way, if the plow is off the truck and stolen there will be no question that you intended to insure the plow as part of the vehicle.

A simple change in vehicle description can save hassle.

My Pollution Article

Read the piece I wrote for our regional business magazine, Mainebiz, covering pollution issues and how insurance does / doesn't respond. Go to http://www.insurancefixer.com/content/pollution.html.

Life In Maine And Other Stuff - Summer is here. I don't think we have hit 90 degrees yet. I know its coming though. The humming birds had been quite frequent visitors - until my wife used brown sugar instead of white in the "nectar." Oh well! The new lawn is looking great. Mowing is now required every four days.

This month starts my one year stint as president of my Rotary Club. It will be a busy year. We are trying to add one new fund raiser and several service projects. Check out Rotary in your area. It isn't just for "old-men" anymore (hasn't been for 20 years). If you can't join, consider supporting their fund raisers. To learn more, go to www.rotary.org or ask around town.

Biggest Insurance Mistakes White Papers - Get my white papers covering the biggest business and personal insurance mistakes. Send a blank email to bizmistakes@InsuranceFixer.com for a copy of the business mistakes paper. Email to personal@InsuranceFixer.com for the personal insurance version. No cost.

Forward This Newsletter To Your Friends - Feel free to pass this newsletter on to others whom you think would be interested.

Your Privacy - I will never sell or distribute your email address to any other person or organization.

Do You Have The Right Insurance? Contact me to discuss an unbiased review of your insurance program. Do you have the right coverage? Can your policies be fine-tuned to improve the protection? Can changes be made to ease the administrative burden insurance causes? Are you getting the service you should from your broker? I can help. Call 207.284.0085 or email me at Scott@InsuranceFixer.com. Remember, I don't sell insurance so I'm unbiased.

Need A Speaker? I'm pleased to speak to trade, business, or service associations about insurance topics. Call 207-284-0085 or email me at Scott@InsuranceFixer.com. See my speaker's page at www.InsuranceFixer.com/ispeaker.html.

Scott Simmonds, CPCU, ARM
Insurance Consultants of Maine, Inc.
Phone 207-284-0085
Scott@InsuranceFixer.com
http://www.InsuranceFixer.com

Unbiased Insurance Solutions

Comments regarding insurance policies or products in this newsletter do not constitute an endorsement. I accept no fees or payments of any kind from any company mentioned in this newsletter.