Some governing documents require that boards obtain insurance only from admitted carriers.
Admitted Carriers. An "admitted carrier" is an insurance company that has submitted its insurance rates to California's Department of Insurance for approval. Once approved, the carriers must use those rates equally with all customers. The Department also reviews the carrier's investments and reserves to ensure they are adequate. Admitted carriers are backed by the California Insurance Guarantee Association (CIGA). If the carrier goes bankrupt, the CIGA covers claims up to the insured's policy limit or $500,000, whichever is lower.
Non-Admitted Carriers. Non-admitted carriers are licensed to do business in California. They are required to go through an approval process with California's Department of Insurance to ensure their financial soundness. They are not required to have their rates approved by the Department and can price their insurance to meet perceived risk. This allows them to insure high-risk clients who might otherwise be uninsurable by admitted carriers.
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