What Is a Reciprocal Interinsurance Exchange?

A reciprocal inter-insurance exchange is an unincorporated association in which policyholders exchange insurance policies to spread around risk by pooling their money together. In the reciprocal setup, the carrier is owned by policyholders, but managed by an attorney-in-fact.

What is meant by reciprocal insurance exchange?

A reciprocal insurance exchange is a type of organization where individuals and businesses exchange insurance contracts. This exchange, which includes two separate entities—an attorney-in-fact (AIF) and reciprocal inter-insurance exchange—is used to lower the risk of insurance contracts.

What is an example of a reciprocal insurance company?

In this exchange, each policyholder covers the others, pooling together resources if a subscriber faces perils. Reciprocal insurers include Farmers Insurance and USAA.