December 6, 2025
Nonadmitted Insurance Options for California Homeowners
Nonadmitted Insurance, otherwise known as Surplus Lines insurance policy options have exploded in popularity and choices in the past two years in California for the home and landlord insurance market.
New MGA/MGU/ Insurer options seem to be coming into the market almost every month.
Many admitted insurers remain on the sidelines.
The California FAIR plan remains a good solid backup. We have written about Cal FAIR several times on this site.
What is Nonadmitted Property Insurance?
Nonadmitted or Surplus Lines insurance is simply insurance not ruled and regulated by the California Department of Insurance. It does not participate in the state guarantee fund. A classic example of a nonadmitted insurer [in California] is Lloyds of London. [Read: Who is Lloyds of London.] But there are tons of other insurers offering up property insurance terms on a nonadmitted basis in California at this time.
Nonadmitted property policies are typically more complicted and more expensive than regular admitted insurance policies. But not always. When purchasing a nonadmitted homeowners policy you will typically need to sign a state mandated D1 form.
Availability of Nonadmitted California Property Insurance Options:
No matter how you measure it, the issuance of surplus lines policies is growing signifcantly in the state of California at this time. According to the Insurance Journal “Surplus lines homeowners insurance transactions were up 119% in the first half of the year from the same period last year…” Risk and Insurance states: “surplus lines insurance market continues to enjoy double-digit premium growth, with troubled property & casualty insurance lines providing key expansion opportunities as standard insurers retreat from volatile segments, according to a report by AM Best.”
While the data for the number of policies written in California is easy to come by – the data for the number of options [insurers] is not. You can clearly see the announcements of “Expansion in Surplus Lines” or “New Home Insurance Options in nonadmitted” frequently. Sometimes, the notation that the options are surplus/ nonadmitted are buried in the fine print of the offering.
Additionally -New platforms for procuring these policies seem to be popping up every quarter. More options mean good news for residents in this state, at this time. Some of these new property insurance platforms are direct to consumer [no agent] and sometimes they are through specific agents or agencies.
Which Insurers Offer Nonadmitted Property Policies in California:
While it is impossible to share a complete list of nonadmitted options, here are some:
Numerous syndicates of Lloyds of London, Scottsdale, Homesite, Markel, Attain, AIG, MSI, Hadron Specialty, Northlight, Kin, Knight Specialty, Sure, among others. [This agency does not work with all of the insurance options listed in our blog posts.]
What are MGAs and MGUs and How are they Related to Nonadmitted Insurers:
To sell a nonadmitted insurance policy you need to have a Surplus Lines policy. Retails agencies do not usually have their own Surplus Lines license. Therefore retail agencies secure these policies through Surplus Lines Brokers. One type of Surplus lines broker is the MGA / MGU model. MGA stands for Managing General Agency and MGU stands for Managing General Underwriter. MGAs and MGUs provide nonadmitted options to retails agencies. Sometimes the marketing of these products are listed with the MGA / MGU name more than the actual insurer. It can be confusing.
It should be noted that MGAs and MGUs can also offer admitted insurance policies as well.
To be more clear, numerous insurance policies have:
- Your Retail Agency with your agent.
- The Surplus Lines Broker
- The Insurer
The Benefits and Drawbacks of Having an Insurance Agent Involved in your Nonadmitted Policy:
I am biased on this subject. Surplus lines insurance for homes is complicated, often expensive, with limited coverage. And some of them don’t even have a financial strength ratings from AM Best.
Therefore the benefit of having an agent is to have someone source, review, explain, and bind the nonadmitted quote/policy for you. Broker Agents by definition are more experienced in this realm than consumers.
The drawback is that you have to work with an insurance agent who may charge you a broker fee and who you may not like. Some vendors claim that having a broker involved can make the policy more expensive due to commissions.
How Do you Procure a Nonadmitted Suplus Lines Homeowner Policy in California?
As with all property insurance in California – you will want to reach out to lots of resources. No one agent or one website will help you. Some brokerage agencies have more options, while some have less. Inquire with them as to which nonadmitted carriers they offer up terms from. Keep lists.
What to Do Once you Get a Nonadmitted Surplus Lines Property Insurance Offer?
When one considers a nonadmitted insurance option it is best to review it with the broker on the phone. There are typically fees and taxes that are not normal on an admitted policy. Terms will often be more restrictive. Subjectives more onerous. The process slower. What exactly are you getting covered for? Who would you call if there was a problem. How do you make the payment? What percentage of it is due at or before close?
Are Nonadmitted Home Policies more or Less Expensive than Admitted Policies?
There are no two exact apples to compare in the insurance world. Therefore its tricky to begin to answer this question. The main street journalists will simply tell you that its more expensive, which it is often is, but not necesarily. That being said I would typically not recommend a less expensive nonadmitted policy over an admitted policy. In General nonadmitted insurance costs more.
How are the Terms on Nonadmitted Policies Less Generous?
Nonadmitted policies can come with a much wider variety of exclusions, sublimits, and other considerations to limit coverage. Typical examples include: Limited [or no] Internal Water Damage, a Peril of the Sea Exclusion, Actual Cash Value Roof Coverage, No Roof Coverage, Theft Sublimits, Higher peril specific deductibles. and numerous others.
