When people talk about a typical policy, they refer to standard car insurance coverage, which follows the common industry practices in the way they insure vehicles and drivers and stay within the usual limitations and restrictions. Average motorists, who have sufficient experience and acceptable records don’t need to make special arrangements and they can get unrestricted policies at reasonable prices.
The best way of describing standard automobile insurance coverage is that it is a commonly sold policy without onerous limitations, restrictions and conditions. Most underwriters follow industry norms in their practices and when they come up with policies and wordings.
Some companies can deliberately break away from generally accepted and understood industry practices by imposing special conditions in return for offering cheaper premiums. At times, they may have to do this to reduce the risks they face to a more comfortable level by controlling them with restricted policies. Otherwise, the risk may be too high for their taste and they may have to turn it down.
Sometimes, being different like having a foreign license, owning an antique automobile or living with a teenage roommate can prevent you from getting a widely available policy. When this happens you may need to look for high risk companies and accept restrictions on your policy.
Standard vehicle insurance coverage also refers to the way a policy protects motorists and their automobiles. For example, a typical policy extends to occasional drivers who use your car with your permission. On the contrary, there are some nonstandard auto insurance policies that limit who is allowed to use the vehicle. Some high risk insurers can provide named driver insurance that only allows the drivers named on the declaration page and no other driver is insured.
So, standard car insurance policies provide coverage, which is widely accepted within the industry and nonstandard policies can have restrictions and special conditions. Usually, most people don’t look for them. You may be forced to buy a non-standard automobile insurance policy with certain limitations and conditions and still pay higher premiums if you are struggling to find standard coverage through mainstream insurers.
The term “standard” is used to mean you can expect the usual benefits you would expect from policies widely sold in the country with generous coverage and grace periods and won’t be surprised with unexpected terms. For example, you wouldn’t expect your standard vehicle insurance policy to come with stipulations that your insurer can use aftermarket parts to repair your vehicle. Instead, you would assume that they don’t engage in any unusual and unexpected practices and pay for the original parts when your car needs repairs because they have already rated your car under this assumption.
So, it is not about the types of auto insurance coverage you have or can have on your policy but more about how reliable your policy and provider is in following the widely accepted industry practices in wording the policy contract, offering protection, allowing usage and drivers, honoring claims and handling grievances.
Often you come across experts and agents starting their advice with “standard car insurance policies”. What they mean with that is that they are referring to policies that would follow the industry norms and therefore would be expected to offer good, solid and reliable protection with no surprises when you have a claim. There wouldn’t be a fine print somewhere that will prevent you from making a claim. And therefore, the agent would expect such a policy to serve the customer as expected and there wouldn’t be any reason not to recommend it.
Nearly all traditional auto insurance companies wouldn’t look at ways of limiting risks in unusual or unexpected manner like limiting who can drive a car, reducing repair costs like using aftermarket parts. Instead, not only would they follow all the state rules and regulations but also follow accepted good standards and business practices in every way. And often they don’t need to resort to such practices since they can turn down the risks that are too high for their liking.
On the other hand, non-standard car insurance companies usually serve high-risk segments of the market and therefore they may have to come up with solutions to control the risk so that some of the drivers and vehicles become acceptable. For example, they may insure an unusual or extra powerful car only if they can make sure only the listed drivers can drive it and nobody else. Otherwise, the risk may be too high to accept.
In short, a typical driver, with a commonly sold automobile can buy his insurance from a mainstream insurer and it is most likely to be a standard policy. Motorists should keep in mind that the usage of standard vehicle insurance policy as a term can vary depending on providers and states.