Surplus Lines Insurance and White List States
Imagine if insurance companies were teenagers, then white list states would be the cool parents who let them throw parties with guests from slightly sketchier neighborhoods. These guests, known in the insurance jamboree as surplus lines insurers, come in handy when no one else wants to take on the weird and wobbly risks on their dance cards.
Key Takeaways
- White list states are the party hosts allowing admitted insurance companies to invite unlicensed insurers for a dance.
- This unusual gathering is referred to as surplus line insurance, geared towards risks too hot for your average insurer to handle.
- They’re the cool spots on the insurance map where high risks are not only invited but also get a chance to boogie under special supervision.
Surplus Lines: The Special Guests of the Insurance Party
In these party states, admitted insurers can bring in a special plus-one: the non-admitted or surplus lines insurer. These are insurers who aren’t licensed in the attendee’s state but have the license in their own home state. It’s a bit like letting your friend from another country drive your car because they have an International Driving Permit.
They come in clutch when there’s a peculiar risk that local insurance companies won’t touch. Think of it as asking that one cousin who won’t freak out to hold your pet tarantula.
Hosting the Risk Party: Regulations in White List States
Each state holds a guest list (the “white list”) of eligible surplus line suppliers who can attend these insurance get-togethers. They’re not licensed locally, which gives them the flexibility to throw their weight around in terms of rates and policy forms, dancing to the beat of their own drum rather than adhering strictly to local choreography.
Beyond Standard Coverage: The Role of Surplus Line Brokers
An insurance event planner, also known as a surplus line broker, is essential for these arrangements. They’ve got special passes (licenses) that allow them to set up these unique coverage parties.
Example Ensemble of Surplus Line Insurers
Prominent members of this exclusive party include:
- Lloyd’s of London: Not just British in etiquette but also in providing bespoke flood insurance.
- AIG and Berkshire Hathaway Inc.: The VVIPs who can handle just about any bizarre risk limbo you can come up with.
Wrap-up With A Bow
Understanding white list states is akin to recognizing where insurance companies can let their hair down and cover risks that are usually kept under the rug. It’s a necessary soiree where the odd, the unusual, and the risky get their day in the sun (or dark, stormy night, depending on the policy).
Go Deeper into the White List World
If you’re diving into the effervescent pool of specialized insurance knowledge:
- “The Invisible Insurer: A Comprehensive Guide to Surplus Lines” by Ima Risk-Taker - Dive deep into the esoteric world of surplus lines insurance.
- “Party of Risk: The White List States of America” by Lucy Fered - A state-by-state discourse on the regulation and opportunities in surplus lines insurance.
So, put on your party hats, or in this case, your thinking caps, and get to know the hosts of the greatest risk capers in the insurance world. Let’s dance the fine line between the regular and the remarkable!
