Credit Score

As industry focuses on discrimination, Root marks one year of Drop The Score campaign

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Campaign to Tackle Credit Discrimination in Auto Insurance Marks Year as National Insurance Regulators Vote on Landmark Study of Industry Practices

COLUMBUS, Ohio, September 16, 2021 (GLOBE NEWSWIRE) – Root, Inc. (NASDAQ: ROOT), the parent company of Root Insurance Company, today commemorated the first anniversary of its Drop the Score campaign to end credit discrimination in auto insurance. The campaign’s anniversary comes as the National Association of Insurance Commissioners (NAIC), a regulatory body that includes commissioners from all 50 states, is launching an investigation into industry practices.

Amid national discussions of racial and economic inequalities, Root works to raise awareness of the discriminatory impact of credit-based auto insurance rates currently used by all major insurers. While credit scores are meant to measure risk, generations of discriminatory systemic policies mean that consumers with poor or no credit, such as immigrants or those with medical or student debt, are forced to pay up. ‘to $ 1,500 more in annual bonuses, regardless of their ability to drive. . This form of prejudice rooted in a product widely mandated by the government is acute for communities of color, with 54 percent of black Americans and 41 percent of Hispanics have poor credit scores or no credit at all. This is because credit scores are often a better indicator of race and income than risk.

US Roads Should Not Be Open To Discrimination, Says Root CEO Alex timm. “But as long as the auto insurance industry continues to rely on credit scores to write premiums, millions of Americans will continue to pay more for who they are, not how they drive.” .

“Thanks to advances in telematics and technology, a future without outdated practices like credit scores is already here. And while the change won’t happen overnight, I’m happy to see the wheels in motion as the NAIC begins its investigation into industry biased practices and we enter the second year of Drop the score. “

The campaign focused on raising public awareness with the publication of a consumption report showing that 82% of Americans expect bonuses to be based on driving record. Building on its public education efforts, the company began to support state legislative action.

The most recent legislative session saw reform measures introduced or enacted in Louisiana, Maryland, Michigan, New Jersey, Oregon and Washington, potentially affecting more than 30 million drivers. Nationally, Root also began pushing the NAIC to look at issues of bias, culminating with testimony from Root CEO Alex Timm ahead of the organization’s decision to investigate the underlying causes of racial discrimination. in industry, including the use of credit. scores.

In addition to push factors, Root used his own model to create pull factors by demonstrating the possibility and feasibility of alternatives to credit-based pricing. Through its app that harnesses AI technology to measure metrics such as hard braking and cornering speed, the company calculates rates based primarily on how individuals drive, rather than their wealth, race. or their ethnic origin.

About the root
Root Insurance is the nation’s first licensed insurance company powered entirely by mobile. We were founded on the principle that car insurance rates should be based primarily on driving behavior, not demographics. Using mobile technology and data science, Root delivers personalized and fair pricing to the right drivers throughout an easy-to-use app.

Root is headquartered in Columbus, Ohio, with tenant 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.

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