Caleb Meriwether, Haven Insurance Partners, visits with Dan Reaves, host of ‘The Dan Reaves Show,’ today, and each Wednesday at 3:30 p.m., to discuss all things insurance.
When you buy insurance in Tennessee—whether it’s for your home, business, or a unique property—you’re entering into a contract shaped by more than just price. Behind the scenes, policies are governed by standardized forms, state-approved pricing models, and in some cases, more flexible alternatives in the Excess & Surplus (E&S) market. Understanding how these pieces work together helps you make smarter, more informed decisions.
Standardized Forms: The Foundation of Most Policies
In the admitted market—insurance companies licensed and regulated by the Tennessee Department of Commerce and Insurance (TDCI)—most policies use standardized forms. These are developed by organizations like ISO and define what the policy covers, excludes, and how claims are handled.
Examples include:
- HO-3 forms for homeowners insurance
- BOPs (Businessowners Policies) for small businesses
- Commercial General Liability (CGL) forms for business protection
These forms make it easier to compare policies between carriers and provide clarity for both consumers and regulators. Some insurers may use their own proprietary endorsements, but even these must be filed and approved in most cases.
Rate Filings and Regulation in Tennessee
In Tennessee, insurance companies must file their rates—the formulas used to calculate premiums—with the TDCI. Tennessee follows a file-and-use model, allowing companies to implement new rates as soon as they are filed, subject to review.
These filings ensure that:
- Premiums are fair and not excessive
- Risks are priced consistently
- Carriers remain financially solvent
This system brings structure to the insurance marketplace and protects policyholders from discriminatory or predatory pricing practices.
The Excess & Surplus (E&S) Market: Coverage for Unique Risks
When a risk is too complex, high-value, or unconventional for the admitted market, it may be placed in the Excess & Surplus lines. These carriers are not licensed by the state but are approved to provide coverage under Tennessee’s surplus lines laws.
E&S carriers:
- Do not file rates or forms with the TDCI
- Can offer custom coverage for non-standard risks
- Must work through licensed surplus lines brokers
E&S insurance is common for properties in high-risk areas, start-up businesses, large-scale events, or new industries like cannabis or cryptocurrency.
What This Means for You
Here’s how the two markets compare:
Admitted Market
Pros: State-regulated, standardized forms, backed by the Tennessee Insurance Guaranty Fund
Cons: Less flexible for unique risks
E&S Market
Pros: Highly customizable, quick to adapt, access to niche coverages
Cons: Not backed by guaranty fund, fewer consumer protections, may be harder to interpret
Whether you’re buying a basic policy or seeking protection for a one-of-a-kind operation, understanding these structures helps you navigate your options with confidence.
1 thought on “The business of insurance – Understanding how to make smarter, more informed decisions”
Helpful customer service and clear policy details.