Standard insurance companies insure drivers who have an average risk rating. In order to be insured by a standard company, a driver must have a clean driving record with few claims.
Substandard companies insure drivers whose risk factors make it hard to be insured by standard companies.
You may need a substandard company to insure you if you:
- have a salvage or rebuilt title
- are a teen driver
- are a high risk driver
- need an SR-22
- need a non-owner insurance policy
A mutual insurance company is “owned” by policyholders. Policyholders purchase insurance services from the company and become part “owners.” However, policyholders cannot sell their stake in the company to another person. Profits may be shared with policyholders in the form of payments or may be kept by the insurance company in exchange for discounts on future premiums.
A stock insurance company is a privately held company or a publicly traded corporation owned stockholders and other stock companies or mutual companies. The goal of a stock company is to make a profit for its stockholders. The policyholders are not impacted by the profits or losses of the company.