Unauthorized Insurer

What Does Unauthorized Insurer Mean?

An unauthorized insurer is a party that claims to be a legitimate insurance provider but is not legally permitted to offer insurance. This could be because the party is a fraudulent entity posing as an insurance provider or because the insurer is not authorized to conduct business in the specific region.

Insuranceopedia Explains Unauthorized Insurer

Unauthorized insurers can cause significant disruption in the insurance industry by engaging in deceptive practices. For instance, they may trick insurance agents into selling unauthorized policies, leading to substantial financial losses for customers.

For example, consider an insurance company authorized to sell policies only in Alaska. If this company deceives an agent into selling its policies in Oregon, customers who purchase these policies would not only lose the money paid in premiums but also face financial harm from uncovered damages incurred during the period they believed they were insured.