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Alternative Car Insurance: Cooperative and Internet-Only Carriers

Updated: September 10, 2018

While it is highly recommended that people get auto insurance policies that correspond to their state’s legal requirements, it is not always possible.

If you cannot afford regular insurance, or your driving history disqualifies you from a policy, you must look into alternative car insurance.

There are many alternative car insurance options, such as cooperative auto insurance and internet-only carriers for auto insurance.

The cheap car insurance alternative you choose must still provide you with good coverage, otherwise it is not worth the money.

When choosing a cheap auto insurance alternative, make sure you are really saving money as compared to regular premiums.

What is Alternative Car Insurance?

Alternative car insurance is something that people can buy that compensates for them not having a traditional auto insurance policy.

Some may want to pay less money than a regular policy, while others do not want to do business with major corporations such as national insurance companies.

The purpose of auto insurance is not necessarily to protect your vehicle, but to make sure you have money to pay for damage caused to other peoples’ vehicles or property. This is why getting some form of liability insurance is mandatory in many states.

But if you cannot afford or do not want to get a standard policy, there are alternatives. But these alternatives must somehow prove to the state’s DMV office that you are able to come up with the money to pay for damages you cause after an auto accident.

Everyone has different reasons for wanting alternative car insurance.

Some may want to pay less money than a regular policy, while others do not want to do business with major corporations such as national insurance companies. In other cases, they have no choice because they are ineligible for a traditional insurance policy because of their driving history.

What Are the Different Types of Alternative Car Insurance?

Depending on the state where you live, you may have some options that are an alternative to traditional auto insurance policies. For example, some states will allow people to purchase surety bonds from a licensed surety company for legally mandated amount.

Some states may have specific agencies where you can deposit a minimum amount of money in an alternative to auto insurance.

This surety bond shows that you have the money in place should you cause an auto accident. However, this bond will not cover your vehicle’s damage, only the damage you cause to the cars or property of other parties.

Some states may have specific agencies where you can deposit a minimum amount of money in an alternative to auto insurance. But this requires a massive up-front investment that is usually in the tens of thousands.

Some businesses in states such as Texas may be eligible to create a certificate of self-insurance. However, there are certain requirements the business must meet, such as owning at least 25 vehicles.

Other options include getting cooperative car insurance or going with internet-only carriers. Cooperative policies are very interesting, but they are not always managed in the most efficient manner.

What is Cooperative Car Insurance?

Cooperative car insurance is a relatively new concept. The idea is to give people a real alternative to major insurance companies, both in terms of price and the level of service provided.

The idea behind cooperative insurance is that the enterprise is run without a motive to make profits.

In a cooperative car insurance scheme, people who belong to a group or organization may band together to create their own insurance policy. For example, farmers from the same state, people living in one apartment building or employees of a certain store can create a cooperative insurance model.

The idea behind cooperative insurance is that the enterprise is run without a motive to make profits. Everyone’s premium goes towards paying for compensation when someone gets into an accident.

While these methods do not always work, because people do a poor job at assessing how much they need from insurance premiums, there are possibilities where you can save money.

If you are interested in joining or creating a cooperative insurance scheme, it is important to do your research and properly determine how much each person needs to pay in terms of their premiums and deductibles.

What are Internet-Only Carriers of Auto Insurance?

There are many companies that sprung up in the past five to ten years that offer auto insurance, but are internet-only carriers.

The company offers insurance policies to customers in many different states. All you have to do is visit their site and enter your zip code to see if you can get one of their policies.

This terminology is often confusing, but internet-only carriers of auto insurance can provide you with very good policies. In fact, these policies are very similar to those offered by regular, brick and mortar auto insurance providers.

For example, Esurance is one of the most famous internet-only carriers that provides auto insurance, along with other types of insurance. Esurance has been around for many years and has a fairly good reputation.

The company offers insurance policies to customers in many different states. All you have to do is visit their site and enter your zip code to see if you can get one of their policies.

Companies such as Esurance will deal with customers online and over the phone. With almost everyone in the United States now having access to high speed internet, it is very easy to conduct insurance business in this manner. You can get your insurance quotes online, along with claims decisions and other information.

How to Save Money on Your Auto Insurance Policy?

Ultimately, you have to assess why you are looking for a cheap auto insurance alternative. Is it because you are disqualified from regular policies? For example, someone with a DUI conviction cannot get a regular policy.

While cooperate and internet-only carriers are gaining popularity, they are not always the cheapest bet.

If this is the case, you may have to bite the bullet and pay more in order to get proper protection.

However, individuals who just want to save money through cheap car insurance alternatives can weigh up their options and see what is cheapest. Comparing regular policies to cooperative insurance and internet-only carriers can help you see where the best deals are present.

While cooperate and internet-only carriers are gaining popularity, they are not always the cheapest bet. There are many cases where you can get a better deal from a standard auto insurance provider.

Do not hesitate to shop around for insurance. Also make sure you are taking the time to study each policy not only in terms of its price, but in the level of coverage that is present.