One of the most important questions to ask your agent or broker before getting a n insurance quote is “what is the financial rating of the carrier you are quoting me”. The Gold Standard is AM Best “Excellent” (A-) or better. This means you are getting coverage from a financially sound carrier; an AM Best rated carrier is required to not only have sufficient capital reserves to pay claims but their financial business practices are reviewed annually.
If you have a mortgage, your bank will demand an AM Best “Excellent” rated carrier. If your agent or broker tells you that he/she is getting you a great deal from a “non-admitted” carrier or surplus lines carrier”, do yourself a favor and “just say no”. These carriers fly under the regulation radar and are only to be used after the Agent/Broker has obtained 3 certified quote rejections from an “Excellent” rated carrier. There are cases when using a surplus lines carrier makes sense, but remember they are a carrier of last resort. If your condo property or apartment building has too many reported claims, or your property is in a geographically hazardous area, such as a hurricane, hail, or fire zone going with a non-admitted/surplus lines carrier would make sense. In these situations, it is nearly impossible for an “Excellent” rated carrier or an admitted carrier to get a sufficient price to justify insuring the risk.
Therefore it is acceptable to obtain coverage from a non-admitted” carrier or surplus-lines carrier. To Recap, Always ask for the financial strength rating of the prospective insurance carrier you are being offered a quote from. If the deal sounds too good to be true, then it probably is! Your HOA members (or you in case that you are the building owner) deserve the piece of mind which comes with high quality admitted coverage.