As the insurance crisis deepens in the West and across the country, policies known as surplus lines are becoming more important.
This lightly regulated and previously niche corner of the insurance market comes with a number of risks, and a new report from Climate Cabinet Education offers policy recommendations.
“Climate change is threatening the affordability and availability of property insurance throughout the United States,” the report opens. “This turmoil is forcing consumers to turn to products known as surplus lines that were never designed to cover large segments of the real estate market, but rather exotic, hard-to-price risks like Bruce Springsteen’s voice or David Beckham’s legs.”
The Mountain West News Bureau has been reporting on soaring premiums and rising policy nonrenewals across the West, a trend driven by climate change-fueled wildfires and the hail and wind from increasingly powerful convective storms, among other factors. Most recently, the MWNB reported on Utah’s statewide 2025 home insurance nonrenewal rate of roughly 4.5%, the highest figure in the country.
Most people get their homeowners insurance from carriers licensed by state regulators and subject to their regulations, and they’re known as “admitted insurers.” But non-admitted — or surplus line — insurers don’t have to follow the same rules. Regulators warn such policies can have higher premiums and deductibles, and may not cover risks like wildfire. They also typically don’t pay into state guarantee funds, leaving consumers unprotected if their providers become insolvent.
“The surplus lines market was never intended, nor is it well-suited, to cover large segments of the real estate market,” the report reads.
Jordan Haedtler, co-author of the report and climate consultant at Climate Cabinet, says coverage has exploded in recent decades.
“What we've seen over the last 20 years is that there's been a dramatic growth in the amount of surplus coverage that is being offered for property and for standard homeowner's policies,” he said.
Just between 2018 and 2022, premiums brought in by surplus line policies protecting homes doubled, “continuing nearly a decade of double-digit growth,” according to the report.
It makes a number of recommendations, including strengthening protections for consumers with such policies, and requiring more data disclosures from providers.
Haedtler said he’d like more Western states to adopt so-called FAIR plans. Those are state-mandated insurers of last resort that can provide non-surplus line options to consumers who lose or can’t find other coverage from traditional providers. He acknowledged that they too “have all sorts of problems,” but said they are still “preferrable” to non-admitted providers.
Colorado’s legislature created its own FAIR plan in 2023, but many Western states, including Idaho and Utah, don’t have them. When states don’t have FAIR plans, insurance expert Dave Jones previously told the Mountain West News Bureau that consumers are more likely to end up with surplus line policies.
“You just have to be a very, very, very aggressive consumer to make sure that you know what you're getting,” he said of what he described as a largely unregulated market. “You're on your own basically.”
This story was produced by the Mountain West News Bureau, a collaboration between Boise State Public Radio, Wyoming Public Media, Nevada Public Radio, KUNR in Nevada, KUNC in Northern Colorado, KANW in New Mexico, Colorado Public Radio and KJZZ in Arizona as well as NPR, with support from affiliate newsrooms across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting and Eric and Wendy Schmidt.
