Homeowner Associations »
High Risk Insurance: Frequently Asked Questions
Question: What forms of coverage are considered Surplus
Line?
Answer: Generally, any coverage which cannot be obtained from an
admitted carrier would be considered Surplus Lines coverage.
Question: What are some of the requirements for a non-admitted carrier
to transact business?
Answer: They must retain at least $15 million in capital and surplus
to show they can pay claims and are not in imminent danger
of becoming insolvent, and they must have transacted business
for at least three years prior to the date of binding.
Question: Do non-admitted
carriers offer less coverage since they are not licensed to
operate?
Answer: No. In the event your non-admitted carrier becomes insolvent,
and you file a claim, that claim will not get paid. However,
they do offer coverage of the same quality, and although
they are not admitted to transact in California, they must
still
be admitted in at least one state. There are also certain
requirements for non-admitted carriers to meet which secures
it from becoming
insolvent, and the premiums are usually lower. The bottom
line is, anyone seeking coverage with a non-admitted carrier
should
not be discouraged.