What type of insurer is not authorized to transact business in a state?

A nonadmitted insurer is one that has not been granted a license or authorization by a state's insurance department to operate within that state. Unlike admitted insurers, which meet the state's regulatory requirements and are subject to its policies and procedures, nonadmitted insurers do not have that official status, meaning they may not write policies or transact business legally within that state.

It's essential to understand that nonadmitted insurers often provide coverage for risks that admitted insurers may be unwilling to underwrite, especially specialized or high-risk insurance. However, because they are not regulated by the state's insurance laws in the same way as admitted insurers, policyholders may face different levels of protection and may need to take additional steps in the event of a claim.