Some time ago, the UK-based auto insurance company, jFloat launched a “collaborative consumption self-insurance platform“:
“jFloat users come together and pay the majority of their premiums into collective pools of 100 people called “floats,” which consist of extended family members and like-minded people who fill out a survey on the company’s website. The cohort can approve or deny people membership. When a member needs to pay a claim that’s below a certain amount (which founder Kim Miller would not share), the money comes out of that pool. About 80 percent of a member’s premium goes to the pool, and 20 percent goes to a reinsurer – insurance purchased by an insurance company – to handle claims that go over the maximum amount. Miller would not share reinsurance partners.
If a pool runs out of money, the cohort can decide whether it wants to continue on, or shut down the pool. If the amount of money in the pool dips below zero, an algorithm decides how much each member owes to get the pool back up to an amount where it can functionally insure the group. The hope is that it the cohort model will bring transparency to insurance matters, and that responsibility to the group encourages people to only make reasonable claims.”