Information for Consumers

If you have questions about the transaction of surplus lines insurance in Colorado please do not hesitate to contact us.
We can be reached by either telephone or email

Telephone: (303)- 681-4924

Email: [email protected]

John Wethey Executive Director

The Surplus Lines Association is a non profit organization. We do not provide insurance but can refer consumers to professional agents that may be able to assist.

Frequently Asked Questions

What is a surplus lines insurer ?

A surplus lines insurer is an insurance company that is authorized to provide most types of insurance in Colorado.  Typically they insure risks that traditional insurers will not. They operate on a different basis than a traditional insurer in as much as they do not have to have the premiums they charge, or  the policies they use approved by the Colorado Division of Insurance.

Who typically buys insurance from a surplus lines insurer?

Large corporations or individuals with unique insurance needs will purchase their insurance from surplus lines insurance because they can provide unique coverage. Homeowners that have a particular exposure, such as wild fire or other catastrophic loss, will access this market. However premiums charged by surplus lines insurers are frequently higher than those charged by traditional insurers and some have a minimum premium that they will charge.

Can I contact a surplus lines insurer directly?

No.  Insurance policies insured with surplus lines insurers must be procured by a surplus lines broker. Your agent or broker should be able to contact a surplus lines broker on your behalf if your insurance need qualifies you.  In order to qualify your agent or broker will have to determine that a traditional insurer will not provide insurance to you. This process is known as “Due Diligence”.

Are surplus lines insurers financially sound?

Yes. A. M. Best, a national insurance rating company, conducts an annual review of surplus lines insurers. They have found that surplus lines insurers are as financially sound as traditional insurance companies.

Presently in Colorado over $1 billion of premium is written by surplus lines insurers.

What things should I be aware of if I purchase insurance from a surplus lines insurer?

You will be required to pay a premium tax on the policy based upon the amount of premium. Currently the tax rate is 3% of the premium plus any fees charged.

Because surplus lines insurers are not required to have their policies approved by the Colorado Division of Insurance they are not required to provide a state mandated amount of time if they cancel the policy.  The policy terms and conditions may be unique and you should read the policy carefully to make sure that you understand the conditions and any exclusions that apply.

No protection for insurer insolvency.  

Traditional insurers subscribe to the Colorado Guaranty Fund. In the unlikely event that a traditional insurer becomes insolvent you will be entitled to have all or part of any claim outstanding paid from this source. Surplus lines insurers do not subscribe to the fund and you would not have this protection. ( it should be noted that no surplus lines insurer has been declared insolvent in the last 20 years)