If you’re wondering how that works, think back to the 1600’s when insurance first started (at a coffee house in London, if you’re into trivia). Merchants needed to protect themselves from the bad things that can happen to ships and their valuable cargo. So, a few of the merchants had the clever idea to band together and pool money to cover costs when one of them lost a ship. This practice was the foundation for what is known today as a “reciprocal exchange”.
While our modern cars are pretty far from wooden vessels sailing the high seas, the principle of a reciprocal exchange remains the same. At Noblr, we serve to connect you with a network of other responsible drivers, determine appropriate premium rates, collect those premiums, and then hold that money so fellow members can get reimbursed when bad things happen.
In insurance speak, the Noblr team manages daily operations of the reciprocal exchange on the membership’s behalf so there’s money on hand when it’s needed. (Though we love managing insurance, we’re aware that our members probably have better things to do!)
A big benefit of the Noblr reciprocal exchange is that it ensures the company remains member-focused. Many insurance companies today are publicly traded on stock markets, answerable to their shareholders with all the profit-seeking motive that this entails. In contrast, the Noblr reciprocal exchange model means that we can focus on what’s best for our members first and foremost, versus managing the business for short-term gains. We believe that this alignment of interests is the noblest way to offer insurance to consumers and to do business in general.
Your monthly Noblr rate includes a small membership contribution. These contributions serve to grow the pool of assets available to Noblr members – supporting the reciprocal exchange’s financial strength – and help keep rates competitive. As the Noblr community grows and develops even better driving habits, Noblr will expand the Noblr Rewards offerings to help you reduce your insurance costs even more. And Noblr will return some of its profits back to you, our members, in the form of subscriber savings accounts – we’ll share more info on this benefit with our members in the near future!
Now, you may wonder whether participating in a reciprocal exchange means Noblr members assume financial liability for other drivers’ policies. Don’t worry—that’s not what our membership means at all. No individual member is subject to a different policy’s risks. This ensures that Noblr members get to reap all the benefits of a reciprocal exchange—lower rates + Noblr Rewards-- without additional out-of-pocket expenses for another member’s misfortune.