Texas-Specific · Insurance Term
Surplus Lines Tax
Definition
Surplus lines tax is the Texas state tax on premiums for policies placed with non-admitted (surplus lines) insurers. The rate is 4.85% of premium, and a small stamping fee is also charged. Both are added on top of the insurer's premium and shown separately on your quote.
In Plain English
Admitted insurers pay premium taxes behind the scenes. With surplus lines insurance, the tax is collected through the licensed surplus lines agent and itemized for you, so it is easy to see.
The tax applies to the policy premium. Insurer policy fees or agency fees may be shown on separate lines. If a policy is canceled and premium refunded, the related tax is usually adjusted too.
The stamping fee is much smaller and funds the Surplus Lines Stamping Office of Texas. Neither charge is set by your agent.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical: a surplus lines property premium of $40,000 carries a 4.85% tax of $1,940, plus a small stamping fee. Compare the total cost, not just the premium, against any admitted quote.
Why It Matters for Texas Property Owners
The 4.85% rate is set in Texas Insurance Code §225.004. Comparing an admitted quote with a surplus lines quote without adding these charges can make the surplus lines option look cheaper than it is.
What to Watch For
- Compare quotes on a total-cost basis, including taxes and fees.
- Ask which fees on a quote are taxes, insurer fees and agency fees.
- Ask how taxes are handled if the policy is canceled early.
Sources
Last updated October 14, 2026 · Primesure editorial team · How We Write