Differences Between State Admitted Insurance Policies, Excess & Surplus Lines Insurance Policies and Association Plans
Okay, so they say laughter is the best medicine. But what if you’re talking about your insurance coverage? Come on now, we all know that it’s no joke. Your patients see you as some kind of medical superhero, who’s able to cure health issues
in a single bound. If only they knew that even though your physician’s cape is blowing in the wind, you’re still trying to figure out the difference between state admitted insurance, excess & surplus insurance and association plans. Yikes! So, who’s going to swoop into your examination room and save the day?
Look no further. Boca Insurance to the rescue! We may not wear kooky costumes, but we’ve got a few skills of our own. In fact, we can give you a breakdown of all three plans and how they can affect you and your practice. But to cut down on all of the confusion, we used some superhuman strength to get you the answers that you need. So, come on by and let us holla at you for a minute. Now get ready, here’s the 411:
- State Admitted Insurance Policies – These type of policies are any insurance policies that are issued by a company that is licensed to sell insurance in the state they’re being purchased in. The state does a thorough review of the company by assessing their policies and insurance forms. If that company ticks all of the boxes for minimum requirements, they get the green light to sell insurance in the state. If your practice has this type of policy, you have some added protection if that insurance company goes bankrupt. The state government will guarantee the claims up to a specific amount, which is a bonus for you.
- Excess & Surplus Insurance Policies (E&S) – The stark difference between this type of insurance policy and a state admitted insurance policy is that E&S carriers are not required to be licensed in the state that it sells insurance in. So, they’re basically unlicensed insurance carriers. They’re not able to issue admitted policies and they can only write a policy if at least three admitted insurance companies have not approved it.
- E&S carriers have less restrictions. Not only are they allowed to customize coverage, they can charge the appropriate rate regardless of how it has been filed with the state. They’re also able to adjust coverage to correspond with the market. By doing this, they accept more risks than a regular insurer would. Unfortunately, you may not be able to collect on claims if the insurance company folds.
- Association Plans – This plan is not regulated by the state government the policy is issued in. This means coverage is determined by the association, price is set by the association, and there are no financial strength requirements. This is a good option if the association put the plan in effect as a cost effective solution to get adequate coverage. Association plans are created to cover health insurance, professional liability insurance, workers compensation insurance, and more. It is crucial to look over exclusions, conditions, and claims handling with associations because of their lack of regulation.
You don’t need to feel powerless when deciding on what insurance works best you. You now understand how they all work, and that some are better options than others. But if you want to be a real hero for yourself and your practice, consider American Insurance Advisers for ALL of your insurance needs.