Within my area in NY, there are several admitted companies whose premiums are often $500 – $1000 more than a surplus lines carrier. Does the insured have the right to place that line with a less expensive company if they wish. I understand full well what the insured is giving up when they insure with a surplus lines carrier.
In most instances a policy cannot be placed with a surplus line carrier just because the premium is less than an admitted policy. Saving money doesn’t factor into the equation when it comes to surplus lines which is part of the headaches brokers put up with when going to the surplus lines market for their insureds.
Funny thing is, is that everyone assumes a surplus lines market will ALWAYS have less coverage. This NOT necessarily true — many of the surplus lines homeowners programs match up against standard carriers, and many times at a more competitive price. Some wholesalers are offering online quoting, binding and direct bill. Not only is this protectionism by the state insurance dept unfair, but it’s not necessarily in the best interest of the consumer (isn’t that the point in the first place?). Let’s also throw into the mix that the surplus lines market now has to “compete” with each state’s Fair Plan…a business competing with a quasi-gov’t agency? What is happening here!! Surplus Lines is always getting the short end of the stick…makes no sense.
What sort of cost savings (if any) are the agents realizing for the home-owner if they go to the surplus market?
Within my area in NY, there are several admitted companies whose premiums are often $500 – $1000 more than a surplus lines carrier. Does the insured have the right to place that line with a less expensive company if they wish. I understand full well what the insured is giving up when they insure with a surplus lines carrier.
In most instances a policy cannot be placed with a surplus line carrier just because the premium is less than an admitted policy. Saving money doesn’t factor into the equation when it comes to surplus lines which is part of the headaches brokers put up with when going to the surplus lines market for their insureds.
Funny thing is, is that everyone assumes a surplus lines market will ALWAYS have less coverage. This NOT necessarily true — many of the surplus lines homeowners programs match up against standard carriers, and many times at a more competitive price. Some wholesalers are offering online quoting, binding and direct bill. Not only is this protectionism by the state insurance dept unfair, but it’s not necessarily in the best interest of the consumer (isn’t that the point in the first place?). Let’s also throw into the mix that the surplus lines market now has to “compete” with each state’s Fair Plan…a business competing with a quasi-gov’t agency? What is happening here!! Surplus Lines is always getting the short end of the stick…makes no sense.