Single Pool

InsureDAO introduces the concept of single cover pool for each protocol. Each insurance product has its own pool and has a different risk premium per insurance cost.

Single pools allow users to buy and sell insurance for one particular protocol. Especially for insurance underwriters, they can limit their liability for coverage to only their selecting protocols.

Since InsureDAO separates insurance pools for each protocol and their risks are segregated, any payout from a certain insurance pool doesn’t affect other insurance pools.

Underwriter

To become an underwriter of insurances, each user needs to supply assets to liquidity pools. Liquidity providers can redeem their pooled assets after a certain period (determined by parameters) unless they are already locked up as an insurance deposit.

After a user provides assets to a pool, they receive an ERC20 token representing their shares in a pool. Once liquidity providers receive LP Token, they start to receive proportional risk premiums paid by insurance buyers divided by their share of LP Token vs. the total supply of LP Token.

In return for receiving risk premiums, liquidity providers need to pay out their pooled assets in an insurable event.

Purchaser

To get protected against losses from accidents, anyone can purchase insurance up to the amount of the liquidity pool. Insurance is available with flexible duration and amount

A user needs to pay insurance premium that includes transaction fee, a certain percent of premium.