What is a mutual insurance company?

A mutual insurance company is an insurance company that is owned entirely by its policyholders. Any profits earned are either invested back into the company or get reimbursed back to the policyholders. In contrast, a stock insurance company is owned by investors who hold stock, and they will receive any profit.

There are pros and cons to choosing a mutual insurance company over a stock insurance company. Opportunities for reimbursement are great, but one con is that it can be difficult to raise capital which makes growth opportunities rare.