Self-Procured Insurance

What Does Self-Procured Insurance Mean?

Self-procured, or independently procured, insurance refers to a policy purchased from an insurance company that is not licensed in the insured’s state of residence. While this practice is legal, it is generally discouraged because the state cannot offer protection if the insurance provider becomes bankrupt. Before buying a policy, it helps to verify the carrier is licensed in your state by cross-checking the complete list of auto insurance companies or a similar directory for your coverage type.

Insuranceopedia Explains Self-Procured Insurance

Admitted insurers are the only entities licensed to sell insurance within a specific state. When individuals purchase insurance from a non-admitted insurer, it is considered self-procured insurance.

This often occurs when the desired insurance product is unavailable through admitted insurers within the state.

However, self-procured insurance carries certain risks because non-admitted insurers are not regulated by the state. Consequently, they are not part of the guaranty fund, which protects policyholders if the insurer becomes bankrupt. This is one reason shoppers comparing the best homeowners insurance companies or top business insurance providers should confirm the insurer is admitted in their state, since an admitted carrier is backed by state guaranty funds.