What type of insurance is characterized by mutual agreements among subscribers?

Reciprocal insurance is a unique type of insurance characterized by mutual agreements among subscribers. In a reciprocal insurance arrangement, individuals or groups pool their resources to provide coverage for one another. Each subscriber agrees to pay a portion of claims that arise from risks faced by any member of the group. This system is built on the principle of mutual aid, where members contribute to a common fund that is used to pay for the losses incurred by any of them.

This kind of arrangement emphasizes collaboration and shared risk among its participants. All subscribers to a reciprocal exchange are typically both policyholders and insurers, which fosters a sense of community and trust. It's important to note that reciprocal insurance is distinct from the other types listed, such as limited liability, reinsurance, and mutual insurance, which operate under different frameworks and structures.

Overall, reciprocal insurance effectively aligns the interests of members, as everyone is invested in minimizing losses and managing risks collaboratively.