Because the new entity has not been in business five years and because the company provides more than 40 percent of the appraisers work, the insurance carrier refused to provide coverage for the appraisals completed for that new company. Mortgage companies are bought, sold, merged and go in and out of business every day. Ask your carrier whether they exclude certain mortgage companies from coverage. Here's the latest installment. It's only natural, then, that some companies have cut corners in order to compete.
Some companies even hook up with carriers that are off shore.
The insurance policy that your are applying to purchase is being issued by an insurance company that is not licensed in the state of California. These companies are called non-admitted or surplus line insurers. The insurance company is not subject to the financial solvency regulation and enforcement which applies to California-licensed companies. The insurance company does not participate in any of the insurance guarantee funds created by California law. Therefore, these funds will not pay your claims or protect your assets if the insurance company becomes insolvent and is unable to make payments as promised.