Substandard Insurance

AAA

DEFINITION of 'Substandard Insurance'

An insurance policy issued to someone who does not qualify for a standard insurance rate. Substandard insurance policies may contain special or restricted provisions or higher premiums because the insured carries a greater risk, which increases the probability that the insurance company will incur a loss.

INVESTOPEDIA EXPLAINS 'Substandard Insurance'

Substandard insurance can be extended to a broad array of consumers, including those with poor driving records (car insurance) or with poor physical conditions (health insurance). It is important for those purchasing this type of insurance to pay close attention to any special or restrictive provision on the policy, since coverage extended by the insurance company may be more restricted due to the increase risk of providing coverage.

RELATED TERMS
  1. Provision

    A legal clause or condition contained within a contract that ...
  2. Life Insurance

    A protection against the loss of income that would result if ...
  3. Insurance Score

    A rating computed and used by insurance companies that represents ...
  4. Health Insurance

    A type of insurance coverage that pays for medical and surgical ...
  5. Risk

    The chance that an investment's actual return will be different ...
  6. Controlled Insurance Program (CIP)

    An insurance policy which consolidates coverage for contractors ...
RELATED FAQS
  1. If both the primary and contingent beneficiaries are unavailable, what happens to ...

    One of the most common mistakes in estate planning is not keeping beneficiary designations up to date on life insurance policies ... Read Full Answer >>
  2. What types of insurance policies have contingent beneficiaries?

    A contingent beneficiary is a person designated to receive the benefits of an insurance policy or retirement account if the ... Read Full Answer >>
  3. Do contractors require subrogation clauses for their contract workers?

    Contractors often require subrogation clauses for their contract workers. To prevent a building owner's insurance company ... Read Full Answer >>
  4. Can you ask your landlord to remove a waiver of subrogation clause from your lease?

    You can ask your landlord to remove a waiver of subrogation clause, but you will both need to agree to its removal or the ... Read Full Answer >>
  5. Are waivers of subrogation clauses ever ineffective in preventing a third-party lawsuit?

    Sometimes waiver of subrogation clauses are ineffective at preventing a third-party lawsuits. In determining who is responsible ... Read Full Answer >>
  6. Can you sue an insurance company for not paying a claim over a waiver of subrogation ...

    Waiver of subrogation clauses generally protect a specific party from lawsuits. Signing a waiver of subrogation means a party ... Read Full Answer >>
Related Articles
  1. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  2. Home & Auto

    How An Insurance Company Determines Your Premiums

    Find out how insurers use credit history to build an insurance score and how it could affect your bottom line.
  3. Insurance

    Are You Protected If Your Insurance Company Goes Belly-Up?

    Consumer protection against insurance company failures actually falls into the hands of state governments. How much protection do you have?
  4. Options & Futures

    For Top-Notch Insurance Coverage, Compare Quotes

    Find out how to use and compare policy options to get the best coverage at the best price.
  5. Retirement

    What To Do If Your Insurance Won't Pay

    Before paying for coverage, find out what you need to do to ensure you get paid.
  6. Economics

    What is Adverse Selection?

    Adverse selection occurs when one party in a transaction has more information than the other, especially in insurance and finance-related activities.
  7. Professionals

    Helping Clients Choose Long-Term Care Insurance

    The need for long-term care has become an inescapable (and pricey) issue for retirees. Here's what financial advisors can do to help.
  8. Stock Analysis

    3 Things That Could Hold Intuitive Surgical Back

    Taking a long-term view that favors Intuitive Surgical developer increasing in value, doesn't mean that there are near-term headwinds facing this company.
  9. Retirement

    Healthcare: What Are You Really Paying For?

    Long-term care costs rise fast and long-term care providers bundle services together, making it tougher for families to understand what they are paying for
  10. Retirement

    4 Myths You Don’t Know About Medicare

    Here are four common misconceptions about Medicare, the federal government’s health insurance program for people who are 65 and older or disabled.

You May Also Like

Hot Definitions
  1. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  2. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  3. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  4. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  5. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  6. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
Trading Center