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The insurance industry is considered mature, which means there are few new players in this business. One of the outliers is Root Insurance, which was founded in 2015 in Columbus, Ohio to challenge the old way of providing insurance. 

Root still uses the metrics and demographic data that other companies use, such as location and sex. The difference is that the company relies heavily on drivers taking a test drive using its app. You download the app to your smartphone, and it starts tracking your driving habits. The data it collects is similar to what other car insurance apps collect: time of day, speed, braking, and ride smoothness.

You can monitor how the app thinks you’re doing using its Driver Scorecard, but you can’t turn the app off or the test drive period is cancelled. The app always runs in the background to collect driving data. Root says that the app can tell if you’re the driver or the passenger, though others are skeptical. It can clearly tell the difference between your driving and your being a passenger in an airplane or on a bus, though. 

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The test usually takes about two weeks, though it can take as long as one month. When the app has gathered enough data, Root will either show you a rate based on your driving habits, or the company will decline to insure you. Once the trial is over and your rate is set, no further info is gathered to reset your rate.

As with any app-based insurance program, there is a tradeoff of privacy for a lower rate. Even though the app no longer collects specific data related to your driving, it will continue to collect anonymized data that the company uses to train its AI. Root may use your data when a claim is filed, but it will not sell your data to a third party. The company’s privacy policy is lengthy, but also surprisingly readable. 

Given that Root is so new to providing insurance, it's probably not surprising that it’s still striving to be available in all 50 states. All interactions with Root, from paying premiums to filing claims, happen through the app. There are no agents to act as middlemen. This makes most processes fast and easy, but sometimes you need extra help. After receiving criticism for its lack of customer service, Root has added humans who can help via phone, email, and online chat services. 

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Root Car Insurance Discounts

Root relies mostly on its test drive app to determine which drivers it will cover. Because it doesn’t cover high-risk drivers, its rates are lower for the drivers it does insure. Root claims to save its drivers as much as 50% compared to their previous rates with other companies. Since its rates are already so low, Root doesn’t offer many additional discounts

There are, however, other benefits that other insurers don’t commonly offer. Roadside assistance is included in all policies at no extra charge, and the company will cover Lyft rides on holidays when people are likely to need a ride home, like St. Patrick’s Day. And like many startups and app-based companies, if you refer a friend to Root, you’ll both get a cash incentive.

It’s worth mentioning that teens who are good drivers can benefit from Root’s system. Everyone in your household can take the test and be covered under your policy. If everyone takes the test, the household rate is averaged. So, even if your teen driver isn’t perfect, having adults in the house who are decent drivers can help lower the average rate. Other drivers in the household on your policy who do not take the test will be given rates based on traditional demographic data, so teens could still be expensive with Root if they don’t take the test. 

Other Types of Policies From Root

Root specializes in auto insurance, including liability, collision, comprehensive, and medical, and you can get SR-22 coverage through the app. Unlike many car insurance companies, Root also provides coverage for rebuilt and salvage titles. How you drive a car with a salvage title matters more to Root than the state of the title. 

Root does not cover motorcycles, RVs, commercial vehicles, nor does it offer gap coverage when buying or leasing a car. 

It does now offer renter’s insurance, which caters to its core customers who tend to be younger and more tech-savvy. Root also offers homeowner's insurance in several states.

Root Financial Fitness

As an insurance company with only five years in business, Root doesn’t have the track record that many of its competitors have. It does have a very good rating from the Better Business Bureau, but it has not yet been rated by organizations like Moody’s or Standard & Poor’s. 

Still, that doesn’t mean we know nothing at all about the company. Root received $350 million in funding in late 2019, and it was valued at $3.6 billion. Its policies are reinsured by three other companies: Munich Re, Maiden Re, and Odyssey Re. 

Root operates independently from any other insurance companies. 

Contact Root

Root Insurance Company

80 E Rich Street Suite 500

Columbus, OH 43215

www.joinroot.com

866-980-9431

The Best Car Insurance Companies in 2020

Our Car Insurance Ranking

  1.     USAA
  2.     Geico
  3.     Allstate
  4.     State Farm
  5.     Farmers
  6.     Progressive
  7.     American Family
  8.     Nationwide
  9.     Travelers

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