Is Coop Car Insurance A Good Deal?

Co-op car insurance is an alternative to the major insurance companies of the world. The idea behind co-operative car insurance is not a new concept. Co-ops have been in operation for hundreds of years. Farmers, apartment buildings, and some stores use the co-op model. The concept behind it is that the power of a group is stronger than an individual. They use this group strength to pool together their resources and get a good deal. In the case of car insurance, is it really a good deal? Let's look at how co-op car insurance can benefit you.

Low Profit

A car insurance co-op is made up of members that want to save money on car insurance. With a traditional car insurance company, part of your premium every month goes towards the profit of the company. The profit is necessary to pay the many executives in the company's salary. With a co-op, you do not have this issue. There are no high-paid executives. The co-op is run by regular people that are also members of the co-op. Many times there is a board of people who help make executive decisions for the business.

The co-op still has employees like claims adjusters, accountants, and clerical workers. However, they pay them a modest salary that is probably less than they could make at a commercial insurance company. On top of that, they do not make a profit. Therefore, the money that you pay into your premiums in a co-op is pooled together and used mainly to pay for the accidents of the members in the co-op.

Types of Co-ops

There are many different car insurance co-ops out there in the marketplace. The vast majority of them is small and confine itself to a certain geographic area. Some co-ops stay within the boundaries of a particular state while some only cover a metropolitan area. The bigger they get as a company, the harder it is to keep costs low. Since the idea of a cooperative is to save money, they tend to stay away from too much expansion.


The service that you receive from a cooperative will be much the same as you get from a commercial insurance company. While they may not have offices on every street corner and an army of adjusters, they will handle your needs in a timely and efficient manner. If you experience a loss, they will still send professional adjusters out to assess the damage. If there are any questions, they have inspectors take a look at the loss as well. Many times, they will use independent adjusters to cover any overflow work.

Once your claim is filed, they will determine how much the damage will cost to repair and pay you a fair market value. They will not pay you any less than you receive from a regular insurance company.

Is It a Good Deal?

Depending on where you live, this type of car insurance can be a good deal. If you are near a good co-op you could save a substantial amount of money. Other times, it may not be any cheaper. Check around your area for any local co-ops and see how much it costs. If it saves you money compared to your current carrier it will be well worth the time spent.


blog comments powered by Disqus