Root, Inc. Congratulates Washington Drivers on Credit Score-Free Car Insurance

Rhea-AI Summary

Root, Inc. (NASDAQ: ROOT) has announced that Washington State has removed credit scores from its car insurance rating system. This change is expected to affect 5.9 million drivers in Washington, allowing for more equitable pricing practices. Root has long advocated for eliminating credit-based pricing, which it believes limits economic advancement for many drivers. The company plans to offer car insurance in Washington later this year, leveraging its telematics-based approach to provide fair rates based on driving behavior.

Positive

• Washington's removal of credit score from rating system supports equitable pricing.
• Root's telematics-based model aligns with fair pricing initiatives.
• Potential increase in customer base in Washington as a result of fairer rates.

Negative

• Drivers with higher credit scores may face rate increases of up to 40%.
• Uncertainty regarding how pricing rebalancing will ultimately affect new customers.

Company shares what drivers can expect as the state adopts fairer pricing

COLUMBUS, Ohio, June 24, 2021 (GLOBE NEWSWIRE) -- Root, Inc. (NASDAQ: ROOT), the parent company of the Root Insurance family of insurance companies, today shares insights with 5.9 million Washington drivers after the state removed credit score from its car insurance rating system.

Root has been focused on bringing fairness to insurance from day one. The company has always offered personalized rates based largely on driving behavior, and less on discriminatory demographic factors that are commonly used by traditional insurers. Root hopes to offer car insurance in Washington later this year.

In 2019, Root launched its Drop the Score effort to have credit scores removed from rating variables allowed in pricing insurance. The modern, app-based insurer already uses credit score to a much-lesser extent than traditional carriers. Root's long-standing commitment to offer fair, personalized rates based primarily on safe driving allows them to better price drivers, while giving them more control over their car insurance experience from start to finish. And as a telematics-based insurer, Root understands driving behavior better than anyone.

“For millions of drivers, credit-based pricing poses an untenable barrier to economic advancement,” says Root CEO Alex Timm. “By banning this practice, Washington State has brought more fairness to its roads for the benefit of drivers and insurers alike. We congratulate Washington on this major step towards equity and urge leaders across the country to follow its example in establishing rules to protect consumers.”

As existing carriers navigate a new market in which they must pull credit scores from their ratings, Root expects that going creditless in Washington will happen in two phases over a number of months, and will impact every driver’s rates differently, depending on their credit score. According to Root’s analysis of competitive rate information, Washington drivers with traditional car insurance and a higher credit score could see a potential rate increase as high as 40%, while drivers with lower credit scores could see an initial decrease in their rate that may disappear once companies have rebalanced their pricing models.

Root’s highly rated mobile app uses telematics via smartphone technology to measure safety behind the wheel. So, drivers are always offered rates that reflect how they actually drive. Good drivers in Washington who see a rate increase in the coming months could potentially save more with Root.

If Washington drivers are interested in learning how they could gain more control of their car insurance with Root, they can get started on their test drive right away. By downloading the Root app and taking the test drive, safe drivers can be ready to purchase a policy when Root hopes to arrive in Washington later this year. Learn more at joinroot.com/washington-credit-scoring-ban.

About Root:
Root Insurance is the nation’s first licensed insurance carrier powered entirely by mobile. We were founded on the principle that auto insurance rates should be based primarily on how someone drives, not who they are. Using mobile technology and data science, Root offers personalized, fair rates to good drivers all through an easy-to-use app.

Root is headquartered in Columbus, Ohio, with renters insurance available in Arkansas, Missouri, Ohio, Georgia, Kentucky, Nevada, Tennessee, and Utah, and auto insurance currently available to drivers in Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Montana, Nebraska, New Mexico, Nevada, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia, and Wisconsin.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws regarding Root, Inc. These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the effects of the removal of credit score from rating variables on car insurance rates in Washington and Root’s ability to offer car insurance in Washington. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. We have based our forward-looking statements on our current expectations, estimates and projections about our industry and our company. We caution that these statements are not guarantees of future performance and you should not rely unduly on them, as they involve risks, uncertainties and assumptions that we cannot predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we have included in Root's Form 10-K for the year ended Dec. 31, 2020, and other SEC filings, cautionary language identifying important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. Copies of Root's Form 10-K and other SEC filings are available on the SEC's website, Root's website at https://ir.joinroot.com/investor-relations or by contacting Root's Investor Relations office.

Media Contact:
Stephanie Teuscher
Sr. Communications and Media Relations Manager
press@joinroot.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/bd362a15-c44d-422c-8e3a-f10a909577ad

FAQ

What recent changes has Root, Inc. announced for Washington drivers?

Root, Inc. announced that Washington State has removed credit scores from its car insurance rating system, impacting 5.9 million drivers.

How will the removal of credit scores affect car insurance rates in Washington?

According to Root's analysis, drivers with higher credit scores could see rates increase by up to 40%, while those with lower scores might see initial decreases.

When does Root plan to offer car insurance in Washington?

Root plans to launch its car insurance offering in Washington later this year.

What is Root's approach to pricing car insurance?

Root uses a telematics-based approach, focusing on driving behavior rather than demographic factors, to offer personalized rates.