Definition - What does Cooperative Insurance mean?
Cooperative insurance is a type of insurance that is offered by a group, an organization, or an association. For example, many employee associations and trade unions offer cooperative insurance policies.
Purchasing cooperative insurance allows policyholders to pool together with others who have similar risks to purchase more extensive coverage at a more affordable rate.
Insuranceopedia explains Cooperative Insurance
Everyone who is involved in the cooperative and pays for the insurance receives a portion of ownership of the policy proportional to how much they pay. So, those who pay for five percent of the total policy would receive five percent ownership.
Trade unions often offer this type of insurance, since there may be certain risks that everyone in the union is exposed to and it makes economic sense to purchase coverage as a group.
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