Are you a good driver with no accidents or moving violations on your record? Do you think you should be rewarded for your safe driving by paying lower car insurance rates? Do you own a smartphone equipped with an accelerometer and GPS functionality? Usage-based car insurance from Root Insurance could provide the ideal solution. Now available in 22 states (including Missouri) and with plans to launch in several more, Root Insurance is stirring up the auto insurance marketplace.
Root Insurance relies on telematics to track your driving patterns. More companies are offering telematics tools as an option (Progressive Snapshot is one example) to their policyholders, but Root is the only insurer that implements it as the primary rating mechanism. The company uses the technology to collect data that determines your premium — the safer and more conscientious you are behind the wheel, the lower your rates.
Here’s how it works. When you apply for coverage, you’ll get access to the Root car insurance app by downloading it to your smartphone. You’ll need to bring your device with you when you drive for approximately two to three weeks. During your “test drive,” the app will track your driving behaviors — speed, braking habits, mileage, etc. At the end of your test period, you’ll find out whether Root will offer you a policy and how much you’ll pay for the coverage.
Usage-based car insurance can be a big money-saver for safe drivers. Root Insurance states that it helps its policyholders reduce their premiums by up to 52%. The company also provides lightning-fast claims service — it typically settles claims within seven to 10 days, which is well below the industry average of several weeks. Policyholders have access to all the basic coverages (liability, comprehensive, collision, etc.) and even roadside assistance.
Additionally, telematics tends to make drivers more conscious of their habits when they’re behind the wheel. The knowledge that the way you drive each day will affect your insurance premiums can make you more careful, which contributes to safer roadways for everyone.
On the downside, Root Insurance does not have agents, a concept that not all policyholders will embrace. Everything operates out of the Root car insurance app (making coverage or vehicle changes, adding drivers, etc.), although phone and email support are available if needed. Many drivers also believe that telematics is intrusive — they don’t want an app tracking their every move — and will steer clear of the technology.
The newness of the company is also an issue. Root Insurance only started writing policies in 2016, which makes it difficult to determine its long-term financial strength and stability. If the company experiences a higher claims volume than anticipated, it could cause premiums to skyrocket and some drivers to lose their coverage. There is also a likelihood of it being purchased by an existing insurance company if it is successful. They will then have the ability to change insurance coverage.
Another loss is in bundling insurance. You can bundle auto insurance with home insurance with an insurance agent or broker. Root insurance doesn’t offer this capability yet.
While Root Insurance may work well for some Missouri drivers, the program doesn’t accept everyone. We provide Telemetrics to help lower your car insurance costs. The best part, you receive affordable insurance while keeping the same advice and consulting from us. Many people in Missouri still prefer the service of a professional insurance agent who is always ready to help you to save money on your insurance. Contact us to request a no-obligation car insurance quote today.