What is co-op car insurance? [Expert Review]

Co-op car insurance uses all the resources from a group of people to get a better deal on car insurance. You may qualify for co-op car insurance if you have a good driving record.

Free Car Insurance Comparison

 Secured with SHA-256 Encryption

Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses...

Full Bio →

Reviewed byJoel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Jun 25, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn't influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Here's what you need to know...

  • A co-op is a group of people who work together to benefit the group as a whole
  • You must have a clean driving record to qualify for co-op car insurance
  • Co-op insurance may not save you money compared to traditional insurance companies

Cheap car insurance co-ops are an alternative to traditional car insurance coverage. Co-op insurance groups combine the resources of many people to try to get a better deal on insurance.

The following article will provide you with additional information about co-op insurance and how it works, including whether or not it saves you money.

Can I get co-op car insurance? Compare the cost of various car insurance rates for FREE with your ZIP code at the top of this page.

How does co-op car insurance work?

What is Co-op Insurance? A co-op is a group of people working together for the good of the group, an idea that has been around for many years. There are stores, farms, and living situations that still work by the idea of cooperation.

Traditional car insurance uses a portion of money paid through each policy holder’s premium to pay employees and executives at the company.

Since a portion of each premium is put towards future claims that will be paid out by the insurance company, premiums must cover the cost of overhead.

With co-op car insurance, there are no executives, only other members serving in leadership positions. Typically a board of members runs the co-op and makes important decisions.

There are some employees but they are limited to adjusters, operators, and clerical workers who are paid an average salary.

A co-op car insurance company is not in the business to make a profit.

This video from eHow talks a little bit about Co-op benefits in car insurance.

So, if it’s not for profit, what is my excess payment going toward? After paying employees, all money goes into a fund to pay for the car insurance needs of the members. Because of this, premium rates remain fairly low.

Free Car Insurance Comparison

Enter your zip code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Does a car insurance co-op really save you money?

The main question when it comes to a co-op is does a car insurance co-op really save you money?

There are many things to consider when answering this question.

For example, co-ops typically do not offer discounts.

Traditional car insurance companies offer numerous discounts such as:

  • Student discounts
  • Safe driver discounts
  • Safety device discounts
  • Anti-theft device discounts
  • Military discount
  • No accidents discount

These discounts may save you more money than a co-op depending on what discounts you qualify for.

This table shows a sample of available discounts by insurer.

Common Car Insurance Discounts Offered by Companies
CompaniesAnti-TheftClaim FreeGood
Student
MarriedMembership,
Group
MilitaryMultiple
Policies
Multiple
Vehicles
Safe
Driver
Allstatexxxxxx
American Familyxxxxxx
Farmersxxxxxxx
Geicoxxxxxxxx
Liberty Mutualxxxxxxxx
Nationwidexxxxxxxx
Progressivexxxxxxx
State Farmxxxxxxxx
Travelersxxxxxxx
USAAxxxxxxxx
Get Your Rates Quote Now

Discounts are an important feature that traditional car insurance companies use to gain customers.

Co-ops also don’t take into consideration the type of vehicle, where you live, and how often you drive.

Depending on your answers to these variables, a traditional car insurance company may raise your premium or lower it.

Free Car Insurance Comparison

Compare quotes from the top car insurance companies and save!

 Secured with SHA-256 Encryption

Why are co-ops so small?

Co-op car insurance companies are small because the larger a company gets, the more overhead and expenses are involved.

The whole point of a co-op is to save its members money. If co-ops begin to expand, they will typically divide into smaller co-ops to cover particular areas and still meet demands while staying small.

The service within a co-op is not as all inclusive as with a traditional car insurance company.

Though co-ops still have insurance adjusters for accidents and people to answer the phone when questions arise, there typically is not a 24/7 mentality as there is with large traditional companies.

All the major needs are still met with a co-op, the response just may not be as quick and efficient as with a large company.

How do I make a claim on my Co-op car insurance?

Much like traditional insurers, co-op car insurance companies often have online options. The car insurance claims process is similar to a traditional insurer’s.

Free Car Insurance Comparison

Enter your zip code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

What are my other alternatives for traditional car insurance?

For most people, a traditional car insurance company is going to be your only choice. And you can certainly do a lot to find cheaper coverage.

But the best way to save is to shop around. You can find a list of the top-rated companies at J.D. Powers, or you can use sites like the Better Business Bureau or A.M. Best to check up on car insurance companies.

In some cases, you will find that your state participates in a state-funded insurance program. These programs are often reserved for people who cannot get car insurance from a traditional source because they have such a bad driving record or have multiple driving convictions.

In some states, you can opt for alternative car insurance, such as a bond that shows you can be responsible for paying for the damage from the car accident. These bonds aren’t cheap, often requiring $10,000 or more to cover the cost.

In order to weigh your options, you have to know what is available.

If you’re sick of Allstate, Chubb, Progressive, or State Farm, co-op insurance coverage might be for you. But if you don’t have the best driving record, you can still get discounts and shop around for cheaper coverage.

How much is co-op insurance? To get a quote on car insurance, try using the online comparison tool.

Start with your ZIP code in the FREE tool at the bottom of this page and get car insurance quotes today if you’re interested in co-op coverage.

Free Car Insurance Comparison

Compare quotes from the top car insurance companies and save!

 Secured with SHA-256 Encryption