Drop the score
It’s time to remove credit score from car insurance pricing and lead the way to a more fair and less biased industry.
Car insurance pricing is broken
Most car insurance companies rely on demographic factors like credit score to determine what you pay, not your ability as a driver. However, the reality is that the best drivers who present the least amount of risk on the road may sometimes have terrible credit scores.
This antiquated approach to pricing forces those with low credit scores to pay as much as $1,500 more in annual premium payments than people with high credit scores—even if they’re actually a safer driver and less likely to get into an accident.
Taking to the streets for fairness
We think it’s time that insurance regulators take action to remove credit score—and the bias and unfair discrimination it brings—from insurance pricing. So when they arrived in our home town for the National Association of Insurance Commissioners conference, we took matters into our own hands to make sure they got the message.
Perpetuating a cycle of inequality
Relying on credit scores disproportionately harms certain groups and reinforces the much bigger problem of inherent bias and systemic discrimination facing our country today.
Credit-based pricing results in certain groups of people being asked to pay more for car insurance, including:
Historically under-resourced communities
Immigrants
People struggling to pay large medical expenses
People with errors in their credit history information
People who have suffered economic crises
Credit score by the numbers
Today, credit scoring is allowed in 46 states (all except Washington, California, Massachusetts, and Hawaii), and it is used by over 90% of all U.S. auto insurers. However, the industry’s lack of transparency keeps drivers in the dark.
According to a 2020 Root consumer survey, most Americans are completely unaware that credit scores are a factor in car insurance pricing, and among those that are aware, very few believe that it’s a fair practice.
82% of U.S. adults think their driving record should be the most important factor in their car insurance price.
66% of U.S. adults are unaware that credit score is a factor in pricing.
77% of U.S. adults agree that car insurance is a burden for many.
Some major insurers charge drivers in predominantly Black and Latinx neighborhoods up to 30% more.
1 in 6 Americans have past-due health care bills on their credit report.
5.5 million Americans have student loans in default.
The stories behind the stats
Using credit scores to price car insurance has a real—and sometimes devastating—impact on people’s lives. Upholding differential treatments in the marketplace comes at a steep price for individuals and our communities. And while removing credit scores from pricing models is not the whole solution, it’s a critical step toward uprooting bias in the industry.
Read our consumer report to find out how fairly priced car insurance stands to offer greater opportunity to customers and companies alike.
Car insurance is a necessity, yet credit scores are impacting payments. It’s literally like a poor tax on the most vulnerable people of society, the people who need the most help. It’s a barrier that just isn’t fair.
Valerie, 33
It’s just life things like rent, food and gas—and yes, car insurance... that are hard to keep up.
Daniela, 24
If I could pay less for car insurance, I could put that money toward my business. And if (my business) grows, I could put more money back toward my health.
Shawna, 27
Fighting bias, one state at a time
A growing number of states are joining the movement to drop the score by passing new legislation that prohibits companies from using credit scores to price insurance.
See what others are saying
Root is committed to bringing fairness to car insurance—and we’re not alone.
Our commitment to fairness
We believe that your price should be determined by how you drive, not who you are. That’s why Root has committed to removing credit scores from our premium price calculation—becoming the first car insurance company to do so.
It’s time to make car insurance more fair and less biased. It’s time to drop the score.