Substandard Insurance


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.

BREAKING DOWN '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.

  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. Risk

    The chance that an investment's actual return will be different ...
  5. Health Insurance

    A type of insurance coverage that pays for medical and surgical ...
  6. Crowding Out Effect

    An economic theory stipulating that rises in public sector spending ...
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