Surplus Lines Insurance (Excess and Surplus Lines)

In Plain English

Standard insurers, called admitted insurers, file their rates and forms with the state. When a property is hard to place, such as an older building, a coastal location or a property with past losses, surplus lines insurers can write it with their own forms and pricing. They are known as non-admitted insurers.

You usually reach this market through your agent and a wholesale broker or managing general agent. A licensed surplus lines agent places the policy and handles the tax filing.

The trade-off is flexibility versus protection. Surplus lines policies can carry different exclusions, minimum earned premiums and claim terms, so read them carefully. Using surplus lines is common for commercial property and not a sign of a bad policy.

Not sure how your policy handles this? Have us review it, or get a quote.

Why It Matters for Texas Property Owners

Texas charges a 4.85% surplus lines premium tax (Insurance Code §225.004) plus a small stamping fee. Policies are filed with the Surplus Lines Stamping Office of Texas. Because surplus lines insurers do not hold a Texas certificate of authority, they are generally outside the Texas guaranty association that backs admitted insurers if one fails.

What to Watch For

• Ask whether a quote is admitted or surplus lines, and why.
• Compare forms and exclusions, not just price, against any admitted option.
• Check the minimum earned premium if you might sell or refinance mid-term.
• Review the insurer's financial strength rating, since a guaranty fund generally does not stand behind it.

Common Questions

Sources

1. Texas Insurance Code §225.004
2. Surplus Lines Stamping Office of Texas
3. Texas Insurance Code §462.004 (member insurer definition)

Last updated October 14, 2026 · Primesure editorial team · How We Write