Standard Policy Law and Legal Definition

Standard policy refers to an insurance policy that provides insurance that is recommended or required by state law. It is an insurance policy that contains standard terms used for similar insurance policies nationwide. Generally, standard policy is drafted by an insurance industrial association such as Insurances Services Office.

In Lundquist v. Allstate Ins. Co., 314 Ill. App. 3d 240 (Ill. App. Ct. 2d Dist. 2000), it was held that a state director of insurance promulgates regulations that create a uniform policy for all fire insurance contracts. Hence, all policies written in states must conform to the requirements of the standard policy. In other words, insurance policies may not provide less coverage than that set forth in the standard policy.