Texas insurance glossary
Surplus lines
Surplus lines insurance is coverage bought from an insurer not licensed in Texas, permitted when the risk cannot be placed with a licensed company on reasonable terms.
It exists because not every risk fits the licensed market. A surplus lines insurer is eligible to write in Texas without being licensed here, and the placement has to go through a licensed surplus lines agent after the risk has been declined by admitted carriers.
The trade is protection. Surplus lines policies are not covered by the Texas guaranty association, so if the insurer fails there is no state backstop, and the policy forms are not filed the way an admitted carrier’s are — read the exclusions.
It is far more common on unusual commercial property than on personal auto, which mostly sits with county mutuals instead.
Sources: Texas Insurance Code ch. 981 — Surplus Lines Insurance; TDI — home insurance glossary. Verified .
A definition, not legal advice and not a quote. Rules and figures change; confirm your own situation against the source named above, or with us, before you act on it. Last checked .
Where this is handled
Knowing what a coverage is called is not the same as knowing what is on your policy. One independent agency can read your declarations page with you and compare the markets that will write your record.