Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Aug 12, 2021

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Key takeaways...

    • A cooperative business is established to serve the common good of the members. Cooperatives are run and owned by their members where each member has an equal say in business decisions and profit share
    • Just like other coops, car insurance cooperatives are based on the values of solidarity, equity, equality, democracy, self-responsibility, and self-help
    • Coop car insurance provides an alternative to traditional car insurance and is sometimes superior to auto insurance provided by for-profit organizations

As a car owner, you have to meet auto insurance requirements to drive legally. Failure to purchase adequate coverage means you may face legal consequences.

The penalties for driving uninsured vary from state to state. In general, driving without car insurance may lead to the following:

  • suspension of your driver’s license or vehicle registration
  • SR-22 requirement
  • fines
  • possible jail time

Make sure that your car insurance meets your state’s auto insurance requirements before you hit the road. When looking to purchase car insurance, compare quotes from multiple providers before you make the decision to settle for one of them.

Comparison shopping helps you obtain the right type of coverage for your vehicle at an affordable cost. Enter your zip code above to compare today!

What is co-op car insurance?

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A cooperative is a business that is owned and operated by its members. All members, whether they are residents, employees, or customers, have a say in the co-op’s decision making and are entitled to a share of the profits.

There are many types of cooperatives offering different types of services including car insurance.

Co-op members come together to create a better world through cooperation, guided by the internationally agreed upon principles.

The goal of cooperative car insurance is to offer an alternative to traditional car insurance for qualified persons. As a driver, you have to meet certain qualifications to purchase car insurance from a co-operative.

You might not be able to purchase coverage from a co-operative if you don’t have a pristine driving record. There are a few things that factor into whether or not a person is eligible for co-op insurance services, and safe driving is one of them.

Besides requiring their customers to have a perfect driving record, cooperatives usually don’t offer typical auto insurance discounts such as multi-car or good student discounts.

Comparison shopping is most effective way of bringing auto insurance costs down without compromising coverage regardless of what type car insurance you choose.

When looking for auto insurance, go online and compare quotes from various providers, including both traditional auto insurance companies and co-op insurance providers, and select the one that best fits your car insurance needs.

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How does cooperative car insurance work?

Co-operative car insurance is in many ways similar to regular car insurance. Drivers purchase coverage for their vehicles, and if they are involved in a covered incident, they receive compensation for any losses.

However, cooperative car insurance differs from traditional car insurance in a few important ways. Take a look:

– Non-Profit

Cooperatives don’t exist for the sole purpose of generating profits. A traditional car insurance company is typically looked at as a for-profit organization, and will always try to give drivers settlements smaller than what is deserved in order to protect their bottom line. There’s less sense of community in some of these cases.

Cooperatives, on the other hand, are okay just as long as they can cover their expenses and keep their average cost to run their business low.

– Less Overhead

The goal of any car insurance provider is to help customers minimize losses through coverage. Providers collect premiums and in return, pay claims for covered losses. To achieve that, the provider has to hire employees and pay for other related expenses.

Administrative costs are by far the highest expenditure auto insurance companies have.

A key difference between cooperative car insurance providers and their traditional counterparts is that co-ops don’t have a lot of employees.

Traditional insurers often hire high-ranking officials with fat pay checks, thus increasing their expenses. Co-operatives only hire employees with direct involvement towards the payment of a claim, such as adjusters. An insurance agent working for a co-op is going to have a specialized field of work.

Co-operative car insurance does have its advantages. For instance, the rates are pretty low, which means affording them and paying your bills on time to rack up good credit can be an acheivable goal. But there are other things some might consider as downsides.

Only Good Drivers Can Purchase Coverage


Traditional insurers will sell coverage to anyone with a car and valid driver’s license, whether they have a good driving record or not. Their driving record will only be reflected in their monthly premiums.

Cooperatives, on the other hand, will only sell coverage to people with exemplary driving records. Usually, cooperatives are small and can’t afford to take risks that come with providing auto insurance for people with spotty driving records.

For-profit organizations are often large with thousands of customers. All of their customers pay premiums every month, and most don’t even file a single claim which helps them generate a lot of revenue each year.

For that reason, traditional auto insurance providers can provide coverage for drivers with less than perfect driving records.

That is a luxury cooperatives don’t have. Co-operatives only accept people with good or perfect driving records to prevent solvency issues.

Unlike traditional car insurance companies, cooperative car insurance rarely comes with any discount as they only provide coverage for drivers with a good driving record.

How can you get a good car insurance deal?


Going through a co-operative insurance company for your coverage is a good alternative to traditional car insurance, but some people find this type of car insurance restrictive.

If you feel like co-operative insurance isn’t the best option for you, you can still purchase coverage from a traditional insurer and focus on bringing your auto insurance rates down.

The most effective way to ensure that you get the lowest rates is comparison shopping. Get quotes from multiple auto insurance companies and settle for the one that offers the right type of coverage at an affordable cost. Enter your zip code below to get started.


  1. https://www.nationwide.com/driving-without-insurance.jsp
  2. https://www.thebalance.com/understanding-minimum-car-insurance-requirements-2645473
  3. http://nfca.coop/definition
  4. https://www.iii.org/article/nine-ways-to-lower-your-auto-insurance-costs
  5. https://www.allstate.com/tools-and-resources/car-insurance/help-lower-auto-premiums.aspx