What does a Diligent Search Affidavit illustrate?

A Diligent Search Affidavit is a document that demonstrates the efforts made by an insurance producer to secure coverage from admitted insurers before seeking a surplus lines policy. This affidavit serves as proof that the producer has actively searched for available insurance options that meet the customer’s needs within the standard market and that these options have been exhausted.

It is a crucial aspect of the surplus lines insurance process because it ensures compliance with regulations regarding the procurement of surplus lines coverage. By requiring a diligent search, regulators aim to protect consumers by encouraging them to first seek coverage from regulated and financially stable insurers. This also helps to highlight the legitimacy and necessity of pursuing coverage from surplus lines markets when traditional options are unavailable.

Understanding the context and importance of the Diligent Search Affidavit reinforces its role in the insurance industry, especially in maintaining ethical practices and consumer protection within the surplus lines market.