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Mutual Insurance Company

A mutual insurance company is a specific type of insurance company usually offering all kinds of different policies for consumers. If you are in the market for a new car insurance carrier, a mutual company is one option well worth considering. A mutual insurance company offers some distinct advantages to customers over what other companies can offer. But there are also some downsides to this structure as well. Knowing more about this option can help you make a more informed decision on your car policy. The more information you have at your disposal, the better off you will be down the road. Evaluate all your options and consider each of them in the context of your own particular situation, and make the choice that fits best with your goals.

Mutual Insurance Option Explained

A mutual insurance company is a corporate structure put together in a particular way to try and deliver as much savings to policy holders as possible. Unlike other types of companies, a mutual insurance company has no shareholders. It is owned by its policy holders, and its management directed by a board that answers to those policy holders. In some cases, all of those who have policies with a company have ownership and voting rights, and in other cases only certain classes of members do so. The difference is based on the charter of each company.

Since the ownership of a mutual insurance company is spread out among its members, the risks are shared as well, spread out in a pool. The premiums consumers pay to get into a company like this are all used to pay for the expenses of running a mutual outfit and to pay for claims. Any distributed surplus monies are sent directly back to shareholders, a large difference in structuring from other insurance companies. This feature helps make this option more attractive in some ways, but also has its drawbacks.

The major drawback of returning all this capital to mutual insurance company shareholders is the fact that it severely hamstrings the corporation's ability to expand or to take advantage of other opportunities requiring substantial capital funding. Any corporate entity desiring to take on such a venture in many cases has to go back to shareholders and ask for financing to help them get going on things like this. Because of financial challenges like these, more than one mutual insurance company has demutualized or changed their structure to better enable them to raise capital and respond to monetary needs or expansion opportunities.

Even so, this option is still appealing to a lot of customers, and there are certainly still many companies using the mutual insurance structure. So if you are interested in pursuing this option, take heart. There are plenty of options to choose from, and plenty of flexibility within the confines of an auto policy contracted with a mutual company. Understanding these options and evaluating them against your specific needs can help you design a plan that makes the most sense for you.

Personal Auto Insurance Options

To begin with, you must take into account the requirements for auto coverage mandated by your home state. Liability coverage is a banner requirement in almost every state, so that is the best place to start when you are building a car policy with a mutual insurance provider. Every mutual insurance company offers flexibility in coverage, and if they are licensed to sell plans in your state, they will be experts in dealing with the legal minimums for coverage and helping you to put together a legally binding policy.

Contact your mutual insurance company to go over your options for liability protection. Start out by analyzing the legal minimum in your home state and thinking about whether this level of protection is sufficient. If need be, you can look up statistics on the average cost of liability claims in car accidents to help you decide. Many drivers do opt to increase their liability limits in their mutual insurance company auto policies, simply because liability is the cheapest part of your policy most of the time and it is relatively inexpensive to increase your limits. Do not make a hasty choice, but make your decision based on thoughtful consideration of price and coverage.

Some states also require additional protection beyond simple liability. For example, you might have to carry personal injury protection (PIP) or some other form of medical coverage. And you may be forced to include uninsured and underinsured motorist coverage on your mutual insurance company auto policy. If this is the case, again, evaluate each part of your overall plan and look at what your state requires in relation to what you feel you need and can afford. If the minimum is all you can handle, at least you know you are protected and legally insured. But if you can add to your mutual insurance company policy without breaking your budget, it may be wise to do so. Policy aspects like uninsured motorist coverage are extremely valuable for all drivers, well worth the cost if you can carry them on your plan.

Work With Your Mutual Company

When you are putting together the particulars of your policy, keep in mind that you want to structure it in such a way that you make the most of every premium dollar. Most of us are working from a very limited budget in our households. Expenses like mutual insurance company premiums can put a damper on your budget in a hurry if you are not careful. You need to work with your mutual company to design an insurance plan that makes every dollar count. As a customer and a shareholder, you have every right to expect nothing less than helpful, personalized service from your provider. This ought to be one of the inherent perks of using a mutual insurance company for your auto coverage needs. Being part of the ownership should certainly have its privileges in this department.

Be sure you claim those privileges when you work with your company. You do not have to browbeat the representative you are working with. Just engage them and make sure you are actively involved in the decision making process. Doing this will not only speed the task along and help it work speedily toward conclusion (a benefit to both of you), but it will also help ensure that you come out with the best possible policy as a customer and a shareholder.

Mutual insurance is a unique option for auto policy consumers in search for a new provider. You can get the coverage you need for your car while also essentially buying into fractional ownership of a large corporation. While this investment does represent risks, there are also a number of possible rewards to be had from setting up a policy this way, both financial and otherwise. Do not be afraid to test the waters beforehand and gather some quotes to see how you might do financially as a customer of one of these specialized companies. The worst that can happen is that you choose to look elsewhere. But there's a good chance a mutual insurance company can give you a great deal on your policy.

 

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