What is cooperative insurance ?

Cooperative insurance is form of insurance policy offered by organizations such as trade unions, corporations or associations to its members. It is a mutual form of aid where premiums are shared by member in order to establish a mutual fund or assets that can later be used by members to aid or help them at the time of unexpected eventualities. Unlike any compensation paid out by traditional insurance companies, pay outs or aids given out under cooperative insurance are not strictly compensation but a form of aid for members to help them go on with their daily lives in spite of of the unexpected contingencies. Cooperative insurance can cover a number of contingencies and losses such as financial deficit, burglary, health and hospitalization, damage to property such as a house and even car or road accidents.

Cooperative insurance only covers its members and properties or eventualities considered to be under the organization’s jurisdiction. 

For example, when one buys property managed by a cooperative, corporation or an association such as an apartment or housing unit, the property is already under the jurisdiction of a cooperative or a corporation, of which the buyer is already a member and has shares in it. The property will already be covered by an insurance policy that covers it for various claims and eventualities. The policy will be extended to the shareholders and this form of coverage is what is called cooperative insurance. Owners of the units will be covered under the units or apartments they have acquired. The owners can make claims eventualities they encounter under the buildings such as exposure to harmful radiations and damage to the building due to accidents. In case of the radiations or sewer problems for example, the health of the member will be the responsibility of the corporation. In case of damage to personal property inside the units or apartments, the policy will cover this eventuality since it has happened inside the apartment which is under the jurisdiction of the corporation or organization.

Since cooperative insurance does not necessarily work like the traditional insurance, it is not automatic that cooperative insurance must work in the same way in all corporations or organizations. It is advisable that one does some personal research on the scope of what is covered under cooperative insurance in terms of personal cover or property cover in a specific corporation or organization before joining or subscribing to it.