In this Root car insurance review, we’ll cover what you need to know before getting a quote, the pros and cons of the company’s offerings, and what we currently know about Root’s claims handling process.
Comparing car insurance quotes is one of the easiest ways to save money. You can often save hundreds of dollars with just a few hours of work.
But these days, it’s not as easy as going to a website, entering your personal information, and picking the option with the lowest price. While that works for buying a plane ticket, when it comes to insurance you’re no longer comparing like-for-like.
That’s because innovations in insurance — powered by telematics (the ability for companies to collect individual data about driving behavior) — are changing how insurers price their policies.
For example, your credit score used to be a big factor in what you paid. Now, data such as how many miles you drive or your driving behavior can play an equally important role. As such, shopping for insurance is becoming more complicated, but also more rewarding — there are more opportunities than ever to save a lot of money by finding the right insurance company.
So how does Root insurance work? And is Root right for you? Here’s what you’ll need to know…
Root Car Insurance: About the Company
Root is a car insurance company founded in 2015 by CEO Alexander Timm, who had worked in the insurance industry for many years and saw its flaws from the inside. Determined that he could create a better, fairer and cheaper business model, Timm set out to launch Root Insurance.
As I mentioned in my review of Metromile, auto insurance is considered a mature industry. The big names sitting at the top of the market have been there for some time. And for the most part, all these companies act the same. They have similar ways they market and sell their product, similar ways they price their product, and similar overhead cost in servicing their customers.
From the outside, I see two major innovations in the Root Insurance business model which, in the right situation, could drastically cut costs for consumers:
- Pricing model
- Sales process
Root Insurance’s Pricing Model
Being a great driver with a clean record might not be enough to lower your monthly premium if you’re unfortunate enough to be lumped into a “bad” demographic.
Teenagers are considered a bad demographic because they’re new drivers and aren’t known for their restraint or good judgment. But certain zip codes — and even entire cities — can be considered a bad demographic.
Take Detroit as an example. A combination of factors, including a state law that requires personal injury protection (PIP) coverage (which guarantees unlimited medical benefits to victims of car accidents) and an unusually high rate of uninsured drivers, makes Motor City the most expensive place in America to buy car insurance… even if you’ve never been in an accident.
Root sees the unfairness in that model, which punishes the many for the sins of a few. Root believes that safe drivers should be rewarded in the form of cheaper car insurance. Well, it turns out that 88% of us think we’re in the top half of safe drivers. To be fair, this study was done in 1980, well before we had smartphones in the car to distract us. But if the same study were repeated today, I bet the results would be the same.
Most of us labor under the delusion of illusory superiority, which you may know by its more playful moniker: the Lake Wobegon Effect. According to former A Prairie Home Companion host Garrison Keillor’s famous line about his fictional hometown, Lake Wobegon is “the town where all the women are strong, the men are good looking, and the children are above average.” In other words, we overestimate our own good qualities and abilities when comparing ourselves to other people.
Clearly, Root would go broke if it based its rates on self-reported data. We would all proclaim ourselves the most attentive, most defensive, and overall safest drivers on the road.
The statistics would show us to be liars. On average, there are a whopping 6 million auto accidents each year in the United States. It seems that many of us are high-risk drivers after all.
So, Root has come up with a cutting edge way to determine exactly who is (and who is not) a good driver. The company uses the technology in our smartphones to measure driver behavior like braking, the speed of our turns, driving times and route regularity.
Root only insures the safest 20% of drivers, which is a big part of what allows the company to offer low rates relative to its competitors (like Geico and State Farm), who base their pricing not on driving ability but rather on some arbitrary factor like credit score.
How the Quote System Works
The process for getting a quote from Root Insurance is unlike anything else you’ve ever done. You’re essentially taking Root along on a test drive. You just download the Root smartphone app (available for iOS and Android) and then drive your car as you normally would. Over the course of about three weeks, the app tracks your driving behaviors, including your braking habits, your turning speeds, and what time of day you typically do most of your driving.
The app then scores you on a 1 to 10 scale, with your score forming the basis of your quote. However, keep in mind that only the drivers with the best scores will be accepted as Root customers, which helps keep rates low.
The process of getting a quote is somewhat more complicated for households with multiple drivers. To get the best pricing, Root recommends each driver in a household download the app and take the test drive.
If a driver in the household (such as a teenager) doesn’t go through the test drive process, while you may be accepted and given a quote, Root’s good driver discount will not be applied to the untested drivers — they’ll be priced more traditionally, based on their demographic risk. As such, the household’s overall rate will likely be negatively impacted.
If everyone in a household has taken the test, an overall score — which is composed of all driver scores averaged together — will determine the rate.
If you already have a Root policy, you can add more drivers to your existing policy. Again, these drivers are not required to take a test drive — but it’s in your best interest to have them do so to see if they can qualify for the good driver discount.
Root Car Insurance Coverage Options
Root has the right coverage for your needs. Some types of coverage are legally required, some are required by the company leasing or financing your car, and some can insulate you from financial ruin in the case of a significant accident.
If you’re not sure which specific type of coverage you need, Root has a handy tool to help. Just answer a few questions and Root will help you customize your policy.
Bodily injury: Required in every state. Covers injuries to others when you cause an accident.
Property damage: Required in every state. Covers damage to other vehicles or property when you cause an accident.
Collision: Pays for covered damage to your vehicle when you cause an accident. If your car is financed, you’re probably required to carry full coverage.
Comprehensive: Pays for covered damage to your vehicle caused by anything other than an accident (like a falling tree, a thrown baseball, etc.).
Medical payments: Required in eight states. Helps pay for injuries to you or your family members no matter who caused the accident.
Personal injury protection: Required in 17 states. Covers medical expenses and lost wages for you and your family members, no matter who caused the accident.
Uninsured and underinsured motorist bodily injury: Covers your medical expenses when you’re injured by an uninsured or underinsured driver.
Uninsured motorist property damage: Required in eight states. Covers your property when it’s damaged by an uninsured driver.
Rental: When your vehicle is being repaired, this helps pay for a rental car. Root’s rental coverage also has the unique benefit that it will pay for Lyft rides.
Roadside assistance: If you have car trouble, help is available through the Root app. This is included in all policies.
Financial Strength and Consumer Reviews
Some shoppers may be wary of buying auto insurance from a startup. What if you file a claim and the company doesn’t have enough money to pay it? If you have this question about more established insurance companies, you can research their financial rating from a company like A.M. Best. But as is the case for other young startups, Root isn’t big enough — or had a long enough financial history — to establish a rating.
The other factor you want to consider is whether an insurer is “admitted” or “non-admitted” (which varies by state). To be an admitted company, an insurer must conform to the specific requirements set by each state. The advantage of doing business with an admitted company is that if they were to go bankrupt, the state would step in and pay your claim. In the case of Root Insurance, they’re an admitted company in each state in which they operate.
Like any company, Root has a few less-than-happy customers. Clearsurance gives them 3.42 stars out of 5. More than 50% of reviewers on the site give Root a rating of “Excellent,” and to their credit, Root addresses reviewers’ complaints directly and invites them to contact the company with additional details so the complaints can be resolved.
Root Car Insurance Pros and Cons
All companies and services have their pros and cons. How does Root Insurance stack up?
- Drivers in the top 20% for safe practices can save as much as 50% or more on their car insurance rates.
- Less emphasis is placed on traditional rating factors, such as zip code, age of drivers and credit score, making it easier for drivers who are negatively impacted by such variables to save money.
- Policyholders’ claims are processed within 10 business days — much faster than the industry standard of several weeks.
- All Root Insurance policies include free roadside assistance, which can be accessed directly through the app.
- No sales agent. This is a con for people who prefer personal attention from a dedicated account rep before buying their insurance policy. The entire process of getting a quote is done through the Root mobile app. Once you become a customer, there’s telephone-based claims and service help available 24/7 at 866-903-7243 or via email at [email protected].
- You won’t get a finalized quote from Root until you complete the three-week test drive.
- You may complete that three-week test drive only to be rejected.
- Root does not offer insurance for motorcycles, ATVs, or commercial vehicles. Nor does it offer other types of insurance, like homeowners or renters. Many companies that do offer other types of insurance will also offer customers a substantial discount on coverage when they “bundle” (i.e., buy more than one type of insurance from the same company).
- Root has not yet rolled out nationwide, although they do plan to do so in 2019. Currently, Root is available in the following states:
Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Montana, Nebraska, New Mexico, North Dakota Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Texas, and Utah.
Root Car Insurance — Summary
If you’re going to spend time doing something, it should be worth the time you spend doing it. Getting a good deal on auto insurance is a good monetary return on your time investment.
A smart financial habit to get into is to list out all of the services you use that have a lot of competitors.
- Car insurance
- Homeowners insurance
- Renters insurance
- Cell phone networks
- Internet providers (depending on your location, some people only have one option)
Then, compare quotes and prices on those services at least once a year. (If you’re short on time, have Trim do this for you.)
We often don’t even think about changing our insurance provider. We just use the same company we’ve been using for years. This is especially true of insurance products, because unless you’re extremely unlucky or a really bad driver, you probably don’t file a lot of insurance claims. Some people go their entire lives without filing any kind of insurance claim.
But investing an hour or two of your time researching new customer offers and comparing costs between companies can save you hundreds of dollars a year on these kinds of necessary expenses.
So, if you feel you’d fit into the top 20% of drivers based on your driving habits, and have a good driving record, give Root Insurance a shot.