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Root Car Insurance began offering policies in 2016 and has already grown to provide services in 17 states with six more expected to be added in the near future.
Their policies are completely smartphone app-centered. If you’re interested in their coverage, you download an app, drive as you normally would for two weeks, and then receive a quote.
You could save a lot of money with Root, but before committing, make sure to compare quotes with other insurance companies to find the best rate. Enter your zip code into our free rate tool above to get started.
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After working in a traditional insurance company and trying to overhaul the system, Alexander Timm decided that the only way to work for a company that operated the way he thought was best, was to start his own insurance company.
Timm was able to secure enough investor backing to launch policies in Ohio in October 2016. Business soon spread to Illinois, and soon coverage will be available in nearly half of the U.S.
Root does all their business through a smartphone app. Once a potential customer downloads the app, he can scan his driver’s license which gives Root the information they need to get started. Then, after two weeks of monitoring driving habits, Root will offer a quote.
Traditional car insurance companies use algorithms based on demographic information. Most of that information is not considered by Root because they place the emphasis on driving habits rather than predicted driving statistics.
Companies like Root that charge premiums based on driving habits are known as “usage-based insurers.” They are a new and rapidly growing sector of the car insurance market.
Customers can pay bills, make claims, and contact Root through their app.
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Root is best for good drivers. “For the best 30 percent of drivers, we cut the price [of insurance] in half,” says founder Alexander Timm. “For the best 70 percent of drivers, we’re the cheapest in the market.”
The other 30 percent of drivers who don’t fit into Root’s target market would be better off finding insurance from a different insurer.
The Root smartphone app keeps track of the following driving habits and uses the information to calculate your risk and your premium:
If your driving habits in these areas fall into the safe and low-risk category, you might be pleasantly surprised by the rate you’re offered. If you fall into a high-risk category, Root will not offer you insurance.
To keep their rates low, they are committed to only insuring good drivers.
You obviously also have to live in one of the states where this insurer is licensed, but even if you don’t, it may not be long until your state is included in their coverage area.
Root offers the main types of insurance that traditional companies offer.
Roadside assistance is included in every Root policy. Rental coverage includes the choice of receiving Lyft credits or traditional rental vehicle.
Property Damage and Bodily Injury Coverages are known as “basic coverage.” They are required in almost every state and cover damage you cause to another party.
To protect your own finances following injury and vehicle damage, you’ll need first party coverage such as Comprehensive, Collision, and Medical Payments or Personal Injury Protection.
With Root Insurance, your main discount is based on your driving habits. If your habits are among the safest, you’ll save 52 percent or more and that discount is applied to all coverages you have through Root.
You’ll be rewarded for good driving habits after about two or three weeks, compared with other companies that won’t reward you until your next renewal which is usually six months.
Root offers a discount to Tesla drivers because Teslas are less likely to be involved in crashes due to their autonomous safety technology.
From most insurance companies, you can enter your personal information into a quote tool and be given a quote based on that information. Root does quotes completely differently.
Their system is based on your driving habits and not on your demographics. To get a quote, you’ll have to download their app and allow Root to monitor your driving for two weeks.
If, after two weeks, they decide you are a safe driver they would like to insure, they will give you a quote. They do not offer instant online quotes.
Premiums aren’t the only factor that matters when choosing an insurer. Their financial standing and outlook and their customer satisfaction ratings matter just as much.
Root is headquartered in Columbus, Ohio, and the Better Bussiness Bureau there has given them an A+ grade with 4.56 stars out of five.
They are not financially rated. They are a new company without a long track record indicating stability. In the state of Texas, their current financial status appears comfortably secure.
They have received financial backing from several investors including Scale Venture Partners, Silicon Valley Bank, and Drive Capital. They have received more financial backing than almost any other start-up company.
While typically no official financial rating serves as a red flag, in this case, you have to balance that reality with the fact that many companies believe in investing and backing this company with millions of dollars.
You need to become familiar with the types of insurances available and then decide what coverage you need.
Once you’ve researched availability and figured out what you’re looking for, you can start comparing rates from different companies.
A great way to get started is to use a quote tool that will find and allow you to compare several car insurance quotes at once. You’ll be required to enter your zip code followed by personal information and then you’ll quickly receive quotes.
The quotes you receive after doing a comparison search will give you a good idea of what traditional companies offer in terms of rates.
If you’re a good driver, you can then decide if you want to pursue a quote from Root. It may be a great company for you, but you won’t know how their rates compare for you unless you’ve checked into other quotes first.
Get started right now by entering your zip code into our free rate tool below!
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