Standard Market
The mainstream insurance market where most consumers with average or preferred risk profiles can obtain coverage at standard rates through regular insurance companies. This market serves customers who don't require specialized or high-risk insurance products.
Example
“After improving his credit score and maintaining a clean driving record for three years, John was able to move from the non-standard market back to the standard market and save $800 annually on car insurance.”
Memory Tip
Standard = Straightforward - most people with normal risk profiles fit into this mainstream insurance market.
Why It Matters
Being eligible for the standard market typically means access to lower insurance rates, better coverage options, and protection from state guarantee funds if an insurer fails. Consumers outside the standard market often pay significantly more for coverage and may have limited options for comprehensive protection.
Common Misconception
Some people believe that all insurance companies operate in the standard market, but many insurers specialize in non-standard or surplus lines markets. Others think that being placed in the non-standard market is permanent, when often consumers can work their way back to standard market eligibility by improving their risk profile over time.
In Practice
A homeowner with good credit and no claims history shops for insurance and receives quotes from five different standard market insurers ranging from $1,200 to $1,800 annually for $300,000 in coverage. Because she's in the standard market, she has competitive options and chooses a policy for $1,350 with comprehensive coverage and a $1,000 deductible from an A-rated admitted carrier.
Etymology
Derived from 'standard' meaning conforming to established norms, and 'market' from Latin 'mercatus' meaning trade, referring to the conventional insurance marketplace for typical risks.
Common Misspellings
Compare insurance quotes and save
Related Terms
More in insurance
Other insurance terms you should know
See Also
Need help with spelling?
Instant spelling checker with dialect variants for 2,000+ words.