What is Cooperative Insurance?
Co-operative (or co-op) insurance is for co-op apartment owners or other co-operative entities, and it covers losses related to their building. The policy covers fire damage, burglary, liability, fire damage, and more for apartment co-ops.
A co-op building generally provides security for common areas, such as the foyer, hallways, roof, basement, outdoor walkways, and elevator. The insurance policy of the co-op association usually covers the house, not the apartments of the individual owners, unless the damage is caused by something that is under the authority of the association.
How Does Cooperative Insurance Help?
Buying co-operative insurance allows policyholders pool at a more affordable rate with others who have similar risks to buy more extensive coverage. Trade unions, for example, will often offer some form of co-op insurance, as there could be certain risks that everyone from the union is exposed to, and it makes sense economically to buy covers as a group.
The typical model for a co-operative is that everyone involved in the co-operative who pays for the insurance receives a portion of the policy ownership proportional to the amount they pay. So, those who pay 5 per cent of the overall program would get 5 per cent possession.
When it is about residential buildings, it is recommended that you find out what the insurance policy of the building association covers. The building will already have an insurance policy that covers itself and owners for lawsuits arising from exposure to lead paint, sewer backups, earthquake damage, and other incidents that could affect the entire system when you purchase a co-op apartment—a housing unit of which you hold a share of the corporation that owns and operates the property.
Key Pointers
Co-op organizations provide co-operative (co-op) insurance to cover damage or loss.
The most common type of co-operative insurance is property insurance. It protects the building's common areas.
Co-operative insurance can be sold by any member-owned company.
Health co-operatives are set up in order to offer health insurance.
