Surplus lines insurance — placed with an insurer not licensed in your state, typically for hard-to-place risks — carries its own state premium tax and often a separate stamping fee.
How it works
Multiplying the premium by the state’s surplus lines tax rate gives the tax owed; multiplying by the stamping fee rate (if the state has one) gives the stamping fee, and adding both to the premium gives the total policyholder cost.
What this does not include
This does not include the specific procedural rules for which party (the surplus lines broker vs. the insured) is legally responsible for filing and remitting the tax — that varies by state.
How to use this calculator
- Enter the premium, state surplus lines tax rate, and stamping fee rate.
Frequently asked questions
Why would a business need surplus lines insurance at all?
Typically because standard, admitted-market insurers won’t write the risk — unusual, high-hazard, or newly emerging risks are common candidates for the surplus lines market.
What does a “stamping office” actually do?
Many states use a stamping office to review surplus lines filings for compliance and collect the associated fee, funding the office’s regulatory oversight function.
Is surplus lines insurance less reliable than admitted insurance?
Not inherently — surplus lines insurers are typically required to meet minimum financial strength standards, though they lack the state guaranty fund backstop that protects policyholders of admitted insurers if a carrier becomes insolvent.
