Thursday, May 31, 2018

Line-by-Line Fun with Root Insurance

"Do you think your car insurance rate is fair?"

I don't have a car, so I don't have car insurance.  I pay nothing for the car I don't have, which I think is completely fair.

"See, here's how car insurance traditionally works.  Your premiums go into a pool of money that covers expenses when you get into an accident."

Yes, just like your heath insurance premiums cover expenses when you get sick.  Waiting to see what the problem is here.

"Here's the flaw in that system.  Those premiums cover the accidents for ALL insured drivers."

Just like my health care premiums are used to cover health care for ALL other customers of my health insurance.  Still don't see the problem- unless you are about to argue that a much more "fair" system would be if my premiums went into a bank account and could only be accessed by ME when I needed it?  What if I need more care than that personal account can provide?  Gotta be a catch here.  Let's go on...

"And...not all of them are good drivers..."

Ah, ok.  So Root Insurance is arguing that it's not "fair" that someone else could have an accident and get covered, because that brings my rate up.  Root is also arguing that only "less than good" drivers have accidents and therefore need to access that coverage.  Which is also not "fair."  Is this a joke?  Let's continue...

"Fact is, the worst 30% of drivers cause half the accidents."  Well, that means that the other 70% cause the other half.  Even if I'm in that other 70%, I'm causing accidents, whatever that means.  Are you about to tell me that the secret to Root's low low premiums is that they only cover people who don't get in accidents?  Really?

"We had an idea.  Let's take the worst drivers out of the equation.  That's right, We don't insure them."

That's what I thought.  So you won't offer insurance to 30% of the population you call the "worst drivers."  Just to the other 70% who still cause half the accidents.  The other 30% can go to The General or whatever.

"Which means fewer accidents, which means more money on hand, which means your premiums can shrink too."  That "can" is pretty significant- it's also significant that you tried to cover it up with a stupid graphic of a hand waving "Number One" and graffiti flying about.

"With Root, you're not paying for other drivers accidents, which means you're saving up to 52%..."

how did you come up with a 52% savings?  Why isn't it 99%?  Or 70%.  Did I hear you right?

"Yeah, that's right.  52%. Find out how much you can save- download the App today."

And that's it.  I've already mentioned Root in a previous post, but this part bears repeating- the way this thing works is, you allow Root to monitor your driving habits for a few weeks, and then it gives you a quote based on your monitored driving habits.  The quote is good for 90 days, and you continue to be monitored to determine your next 90-day rate.  I fail to see how this is any different from The General or any other cheap, temporary and barely legal car insurance deal which technically provides coverage but will dump you first chance it gets, except that those other companies don't require you let them be a passenger on every trip.  And if they dump you the first time you have a fender-bender, they don't say so in their ads, like Root basically does- the moment you hit something and are at fault, say goodbye to your low rate because Root only insures GOOD drivers, which you used to be until you made that one mistake.

But hey, again, I don't own a car, so it would seem I don't have a dog in this fight.  Except I think it's inevitable that the Root strategy for selling car insurance will be moving into the health insurance industry in no time, and we'll have BlueCross and Kaiser and MetLife monitoring our donut intake and our visits to 7-11 and we won't even think about it because after all I've Got Nothing To Hide What Do I Care If They Know What I Eat and Drink It's Not Like I Don't Tell Everyone on Facebook Anyway.

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