3 ways traditional car insurance is unfair

Car insurance. Something you probably wouldn't think much about if celebrities and talking animals weren't constantly inundating your commercial breaks.

But we're here to tell you that you should be thinking about it—beyond smirking at the latest jingle. Because car insurance is needlessly complex, clumsy, and straight up unfair and you may not even realize it.

We're bringing attention to the problem by offering a solution.

The car insurance industry can needs to do better.

Here are some of the ways car insurance today is unfair to you, and what we've done to fix them.

It's unfair because it's based completely on demographics.

The old way: Until recently, there's been no way to give you a rate based on what really matters: how you drive. So insurance companies took their best guesses based on your category: your occupation, marital status, education level, and credit score.

They put you in a box and your box determines your price.

This approach is outdated and often deeply unjust.


Who deserves to be rated based on their neighbor's accidents? Did your brother suddenly become a better driver the day he got married?

Demographics are helpful in their proper place, but relying only on a customer's category to price insurance is unfair, unnecessary, and leaves a lot of people out in the cold.

The Root way: We're fixing an unfair insurance industry by rating drivers based on how they actually drive. And we're using the latest technology to do it. If you're married, great. Single? Awesome. The main thing that matters is what you do when rubber meets the road.

It's unfair because shopping for it is bad. Really bad.

The old way: As it stands now, you have two choices when purchasing traditional car insurance:

Choice A: Find an agent.

The problem? Simple economics. Agents work on commission. The more they sell you, the more they make. And that means that you'll often end up paying more for insurance products and add-ons that don't actually make sense for your situation.

Purchasing insurance from an agent is also inconvenient and time-consuming. Who wants to take the time anymore?

Then there's Choice B: Figure it out for yourself online. But there's a reason no one wants to do that: shopping online for car insurance involves lengthy forms, invasive questions, confusing terms, and hours of frustration.

(And all the shiny ads for comparison shopping websites? They exist for one reason only: to gather your data and sell it—usually to insurance agents.)

Insurance shopping is one of the worst consumer experiences still available in 2017. It's twenty years overdue for massive innovation.

The Root way: Enter massive innovation. Root is app-based insurance. No agents. No hassle. You can sign up in under a minute, and you can choose your coverage right in the app. Easy—it's a word you won't hear with insurance the old way.

It's unfair because they can raise your rates for no reason.

The old way: Price optimization is a particularly unfair practice of traditional insurers. It happens when insurers look at the customer base and use their data to predict who is least likely to cancel their policies even if their price goes up. Then they charge those people more.

Yes, you read that correctly. This is a price increase that has nothing do with changes in risk or behavior fluctuations—they just do it because it's possible.

Insurance companies often create complicated legal structures to allow them to do this legally. And they even do research to determine the maximum amount they can raise prices without inciting a mass exodus. They know their numbers.

The good news? Price optimization is now illegal in some states. And regulators are doing their job and cracking down on this practice wherever they find it.

But wouldn't it be nice if traditional insurance companies just did the right thing in the first place?

The Root way: Doing things the right way. We don't engage in the practice of price optimization. We don't believe in it. Our rates are never arbitrary. You drive and we do our level best to give you the rate you deserve.

The good news? It's 2018. None of these problems need to be the way that they are. Root has the technology and the knowledge to make car insurance better—to make it fair to you and deliver a fantastic product.

Download the app and get started now.

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