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 are required to use those rates with all customers equally. The Department also review the carrier's investments and reserves to make sure they are adequate. Admitted carriers are backed by California's Insurance Guarantee Association (CIGA). In the event 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, also called "surplus lines," are licensed to do business in California. They are required to go through an approval process with California's Department of Insurance to make sure they are financially sound. 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 that might otherwise be uninsurable by admitted carriers.